The business risk of misaligned D&I

Last week Sex Matters convened a group of city professionals to talk about sex and gender.

The “Sex Matters in the City” breakfast, hosted at a private equity firm, attracted bankers and senior professionals from finance, HR, and law. Each brought different ideas and perspectives, as well as energy and concern for how their industry is creating risks for firms and for society. This will be the first of a series of meetings drawing in professionals from both the financial and corporate sectors. (You can register your interest to be involved here.)

They discussed concerns that corporate diversity and inclusion efforts have become overly focused on gender identity at the expense of addressing barriers to inclusion for women, people with disabilities, ethnic minorities and other under represented groups. 

Monica Kurnatowska, Cathy Pitt and Sam Bussey from Sex Matters’ advisory group all spoke passionately and knowledgeably about the reputational and legal risk to firms that fail to recognise when sex matters, and the negative impact on progress for inclusion and diversity. 

Gender self ID through the back-door: corporate reporting regulations

One urgent issue on the agenda was the Financial Conduct Authority’s ill-thought through proposal to force PLCs to collect information on the gender identity of their board members (“women, “men” or “non-binary”)  instead of continuing, in line with the requirement of the Companies Act 2006, and the practice pioneered by the FTSE Women Leaders Review,  to focus on the balance between male and female senior leadership, based on sex. 

This regulation won’t just cover financial services companies but all listed businesses. 

We understand that the FCA (which includes amongst its senior management the Chair of Stonewall) is planning to issue regulations in the new year. Although the formal consultation has closed, there is still time to raise the issue with the FCA.

Following on from the meeting, Sex Matters together with Legal Feminist have produced a four-page briefing on the legal, practical and reputational risks of the FCA’s proposed approach.

We propose the FCA take a simpler approach in line with the law: companies should collect data on sex as recorded on birth certificates, in the same way as the census. This would reflect the current law and balance transitioned people’s right to privacy (as secured by a Gender Recognition Certificate) with the purpose of the measure, which is to promote women on boards and executive committees. 

We hope that the FCA will pay attention to the risks it had not considered, and to the recent decision from the Supreme Court in the “X Passports” case:

“There is no judgment of the European Court of Human Rights which establishes a positive obligation to recognise a gender category other than male or female, and none which would require the Secretary of State to issue passports without any indication of gender.“

The next step by Sex Matters – and the network of business and financial professionals  gathered at the meeting – is to get this briefing into the hands of those concerned with risk across the business and financial sector.  

If you work in the corporate or finance sector and would like to be invited to future meetings, or to help us get this briefing  into the hands of people who should read it, register your interest here. 

In the the longer term, we will be working on producing briefings on the business case for a more balanced approach to diversity and inclusion, and on what the law actually requires when it comes to sex and gender identity, for the C-Suite and board, and for HR.