The Financial Conduct Authority and the Prudential Regulation Authority have published proposals to boost diversity and inclusion and support healthy work cultures, reduce groupthink and unlock talent. The proposals also aim to drive better internal conduct at firms and improve understanding of diverse consumer needs.

Sam Woods, chief executive at the PRA, said: “Diversity and inclusion play an important role in guarding against groupthink within firms. Firms in which a broad range of perspectives is welcomed and encouraged will manage their risks better, advancing the PRA’s objective of safety and soundness.

“Stronger diversity and inclusiveness should also make firms more competitive by enabling them to attract a wider pool of talent. We are tabling proposals today which we think will advance our objectives, alongside existing core parts of our regime such as capital and liquidity requirements, and we welcome views on them from all stakeholders.”

Nikhil Rathi, chief executive at the FCA, added: “For UK financial services to be competitive and for the companies in it to be well run with healthy work environments, it is vital they attract, retain and promote the best talent. The data suggests this isn’t happening. Our proposals will encourage the largest firms to put in place plans and report against their delivery.”

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