Financial Regulation Is Strengthened By Diversity
The current financial chaos is producing a lot of debate about regulation. On one hand we’re told that very tight scrutiny, emboldened by severe legislation, is a must; whilst others say more ‘good, moral people’ from the City are the answer. Both positions have merit. But urgent action to widen the pool from which Board Directors is drawn is one essential and immediate option, insisting that many more women become directors of the most influential companies.
Few would deny that, as Andrew Phillips said recently in The Guardian, a ‘welter of regulation’ cannot in and of itself avoid further catastrophe for the Threadneedle Street and City of London and Wall Street.
Of course ‘good, moral’ people are a pre-requisite of effective reformation of the financial system; and of course this must include people of ‘all talents’.
Diversity improves scrutiny
What Lord Phillips might also propose, however, is that none of this is likely to deliver unless the talents involved are those of a truly diverse lot, in background, ethnicity, gender and otherwise.
The best way to secure proper scrutiny is to ensure, however well meaning they might be, that decision-making groups are not also a collection of people with much, beyond the necessary skills and expertise, in common.
Diversity improves business performance too
We already know that diversity at the top makes for successful business. Group members of different sorts, from a variety of backgrounds, aren’t an optional extra when it comes to effective group working. They’re essential.
And the UK workplace equality legislation to deliver this – applicable as much in the boardroom as on the shopfloor – is already in place.
Read more about Business & Enterprise and about Gender & Women.