New diversity and inclusion standards will drive financial services organizations to enhance internal and third-party compliance practices to integrate new diversity and inclusion policies, metrics, and reporting. As part of the changing regulatory environment and ongoing reform of the financial sector, six financial regulators recently issued Joint Standards that financial services firms may follow to assess, report, and publicize their diversity and inclusion efforts.
The new diversity and inclusion reporting is part of a larger move toward increased transparency within the financial services industry and growing pressure for board members and senior management to lead their organizations in cultural change. The U.S. actions also come amid a global trend toward legislating diversity and inclusion requirements in the financial services industry.
As the regulators supervise individual companies—in areas such as governance and culture, overall management compliance, and fairness principles—they may evaluate diversity and inclusion practices as well as look to identify diversity and inclusion trends and leading industry initiatives. While the Joint Standards are a set of recommended practices, failing to adhere to them could increase reputational risk at a time when many firms are under regulatory and public scrutiny with respect to culture and business conduct.