Raising Awareness of Diversity and Inclusion: Financial institutions’ voluntary reporting
On August 2, 2016, the federal banking regulators—Federal Reserve Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation—jointly published a list of Frequently Asked Questions and Answers (FAQs) providing guidance to financial services firms regarding their “Interagency Policy Statement Establishing Joint Standards for Assessing Diversity Policies and Practices” (the Joint Standards). The Joint Standards were released in 2015 by the federal banking regulators together with the Consumer Financial Protection Bureau, the Securities and Exchange Commission, and the National Credit Union Administration (collectively, the Agencies).
The Joint Standards encourage financial services firms to self-assess their diversity and inclusion policies and practices at least annually, to submit information to their primary federal regulator, and to disclose the relevant policies and practices on their Web sites. As such, financial institutions will deem these Standards as regulatory expectations.
The FAQs indicate that financial firms may now submit self-assessments for the calendar year 2015 to their primary federal regulator. They may also submit successive annual self-assessments within 90 days of each calendar year-end. The Agencies indicate they may use the submissions to monitor trends in the industry and to identify “best practices.”
The new diversity and inclusion self-assessment voluntary 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.
KPMG recently issued the attached paper on this important topic (Impact and Influence: Raising Awareness of Diversity and Inclusion in Financial Services). This paper analyzed the growing regulatory expectations regarding diversity and inclusion awareness, accountability, and transparency. We would welcome an opportunity to speak with you about these regulatory expectations in more detail.