Pay of London's top executives to be linked to diversity

THE idea of making London more diverse could see pay of senior executives of the city being linked to make progress on this idea, UK's financial watchdogs have said.

According to The Guardian, Bank of England and the Financial Conduct Authority (FCA) want to speed up the progress in making the city more diverse and inclusive, which they feel could boost the safety and soundness of UK banks and investment firms.

Moreover, the regulators were considering rules to make senior executives accountable for diversity in their firms and also linking progress to their pay.

FCA and Bank of England say the pace of reforms has been slow and think a more diverse financial sector could boost decision-making of companies and also cater better to customers' needs.

“We are concerned that lack of diversity and inclusion within firms can weaken the quality of decision-making. We look forward to an open discussion on how we should use our powers to further diversity and inclusion within financial services, to the mutual benefit of firms and their customers,” Nikhil Rathi, the chief executive of the FCA, was quoted as saying.

Most of the banks, investment firms and insurers are signed up to the voluntary Women in Finance charter, which is backed by the Treasury, and commits firms to link pay to gender targets. Banks including NatWest and Lloyds are among the biggest firms to have set such targets.