Bank of England admits ‘substantial’ diversity failures

A review of ethnic diversity and inclusion at the Bank of England has found a ‘leaky pipeline’ in recruitment when it comes to ethnic diversity.

The review revealed that while the bank has attracted an ethnically diverse pool of experienced-hire applicants, the share of minority ethnic candidates fell substantially between application and appointment.

After joining the Bank, white colleagues have tended to receive higher performance ratings. They have also typically been afforded greater opportunities for career development and progression than minority ethnic colleagues.

Promotion rates for white colleagues, particularly those in more junior roles, were also generally higher than for minority ethnic colleagues.

The level of pay and pay rises were equivalent for white and minority ethnic colleagues at the same pay grade. However, bonuses (measured as a percentage of base pay) were on average lower for minority ethnic colleagues than white colleagues. Most, but not all, of this bonus gap could be accounted for by lower performance ratings.

Minority ethnic colleagues were more likely to leave the bank. The review said that this was not surprising given the disparities in their career experiences.

These higher attrition rates, coupled with fewer opportunities and slower promotion rates, led to lower representation of minority ethnic colleagues at senior levels.

These disparities in employee life-cycle outcomes were found to be common across all different minority ethnic groups.

The investigation also found that minority ethnic employees generally felt they were treated with respects. However, relative to their white counterparts, many reported feeling less included and were less likely to believe they were treated fairly.

Minority ethnic colleagues also tended to report lower levels of psychological safety and greater exposure to discriminatory or inappropriate behaviours.

The bank’s mechanisms for reporting inappropriate behaviours were not always trusted to operate in a safe way that would lead to appropriate action. Disparities in trust and psychological safety were more acute among black colleagues.

There were some common themes relating to management culture which reinforced and perpetuated the outlined disparities in employee life-cycle outcomes and lived experiences.

For example, the culture at the bank means that diversity and inclusion has often been under prioritised in favour of other work. This may have resulted in managers not generally identifying and seizing opportunities to disrupt inequalities, and not typically recognising when they were unwittingly contributing to unequal outcomes.

In addition, while the senior leaders often indicated their desire to make progress in racial inclusion, the bank’s overall strategy lacked focus and clarity.

“The experience of colleagues with different ethnic backgrounds has not reflected the kind of institution we want to be,” said Andrew Bailey, governor of the Bank of England. “And I, alongside my fellow Governors and Court, will lead the changes we need to make and implement the Review’s recommendations in full.”

Bailey added: “I am confident we can make this institution an organisation where everyone can thrive and feel proud.”

The review consulted the Bank’s Ethnic Minorities Network (BEEM) throughout, which offered both advice and challenge on the findings and recommendations.

Commenting on the Review, the co-chairs of BEEM said: "The Bank of England Ethnic Minorities Network (BEEM) welcomes the Court Review of Ethnic Diversity and Inclusion, the findings of which were not news to minority ethnic colleagues. We support the Bank in its transparency and willingness to face up to and tackle these issues head-on, through a concerted effort and commitment from the Bank leadership to fully implement the recommendations agreed with Court. It is so important for a public organisation like the Bank to take the lead in becoming the organisation it aspires to be for the benefit of all its staff.”

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