International standards could be more explicit in articulating expectations on diversity and inclusion practices.
Strong diversity and inclusion (D&I) practices by financial institutions can support “core prudential objectives” by improving the quality of corporate governance of regulated financial institutions, according to a new BIS (Bank for International Settlements) report.
The report examines emerging regulatory approaches informing financial institutions’ D&I practices. There has been “notable progress”, both in improving firms’ internal D&I practices and external dealings with customers, it says.
However, regulatory approaches “vary significantly” across jurisdictions, BIS said, with some placing the emphasis on the diversity of decision-makers within firms, others on advancing broader social justice policies, whereas some jurisdictions are focused on customer-related issues from the perspective of the accessibility of financial services.
“It might be worthwhile for financial regulators to consider consolidating these disparate regulatory issuances, to have a coherent regulatory framework covering all D&I aspects that matter for financial institutions,” the report says.
“Firms themselves would benefit from such a holistic approach to D&I.”
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