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LSE publishing study on diversity in financial services

LSE study: Diversity needs quotas to reach results

To reap the gains from diversity you need quotas and monitoring supported with real culture change. This is the message in a report about inclusion in financial services from The Inclusion Initiative at London School of Economics and Political Science.

The report says diversity and inclusion should be moved out of HR, and instead emphasis inclusive leadership in every aspect of the business.

“Inclusiveness as a style and form of leadership has to be deliberately honed. Leaders who may have been promoted on the basis of their core technical expertise need training in how to lead inclusively. This is especially important when the team is culturally, cognitively and linguistically diverse, the authors say.

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Diversity and inclusion initiatives are generating apathy and cynicism in financial services, according to the report written by Dr Grace Lordan, Director of the Initiative at LSE and Lutfey Siddiqi, Professor in Practice, also at LSE. Their study is based on interviews with 35 senior leaders at global financial services.

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One executive is quoted: “We have mostly launched into D&I initiatives without senior executives making an effort to explain why that is important. Some colleagues simply roll their eyes.”

Another executive commented: “We have policies and guidance on how to get people into the room. However, once in the room, we don’t know how to ensure that people are heard. If there isn’t an environment of trust, people wouldn’t express themselves authentically whether they are asked to speak first or last”.

According to the report, without inclusive leadership the competitive edge that diversity brings goes unrealised. As one female executive commented, “As the only woman at the meeting, if I know that the others have already reached consensus, it’s easier for me to hold back my views”.

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The report discusses the need to avoid confirmation bias when hiring, given that many of those interviewed raised a tendency for too many managers in financial services to hire in their own likeness.

One executive is quoted: “I don’t know why or how but we all end up being similar type of people in financial services!”

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