Dáil Éireann Debate, Thursday - 28 February 2019
29. Deputy Thomas P. Broughan asked the Minister for Finance the steps he is taking to encourage diversity and gender equality in appointments to the senior positions in the banking and financial services industries; and if he will make a statement on the matter. [9761/19]
View answerAs part of the Irish Retail Banking Culture Report provided to me by the Central Bank in July 2018, Diversity and Inclusion Assessments were undertaken and each bank was instructed to submit an outcome-focused diversity strategy supported by an implementation plan, containing, at minimum, clear expectations, implementation targets and a range of measures of diversity. These plans are currently being assessed. The Central Bank will also conduct a thematic review of diversity in the insurance sector in 2019.
The Central Bank is committed to driving diversity at senior levels in regulated financial services firms, and focuses on diversity in its intensive and intrusive supervision approach. Lack of diversity at senior levels is a leading indicator of heightened behaviour and culture risks.
Despite a focus on gender in recent years, the Bank sees diversity extending beyond that. Different personality types, educational background, ethnicity, and diversity of thought can mitigate the risk of groupthink, improve decision-making, increase the effectiveness of internal challenge and enhance firm culture.
The Central Bank’s Corporate Governance Code for Credit Institutions and Insurance Undertakings 2015 requires that firms establish a written diversity policy for selecting persons for nomination as board members.
The European Banking Authority (EBA) has outlined that ‘best practices have evolved to reinforce the importance of diversity at the management body of regulated financial services providers across Europe.’ EBA ‘Guidelines on the assessment of suitability’ state that; ‘The diversity policy for significant institutions should include a quantitative target for the representation of the underrepresented gender in the management body’.
The Capital Requirements Directive and Markets in Financial Instruments Directive also prescribe diversity requirements for in-scope firms.
The Central Bank has reported on the lack of females in senior financial services roles for a number of years. Its annual report on the demographics of the applications for approval for the most senior roles in regulated firms will be published in the coming weeks.
In addition, the Central Bank’s senior officials continue to address this topic with the CEOs of regulated firms directly and through a comprehensive series of speaking engagements.
I am informed by the Bank that it has put significant emphasis on the importance of diversity and inclusion within the financial services sector in recent years, and will continue to do so. However, in the absence of improvements in diversity at senior levels in regulated firms, the Bank will consider whether it is necessary to introduce further requirements.
