How to ACT Guidance Pillar 2 : Action

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01. Pillar 2: Accountability and reporting

This pillar enables firms to set out the approach they are taking towards improving processes, implementing changes and identifying targets. It should be clear to stakeholders where oversight and accountability for delivering on values lies. It is expected that this will be a member of senior management, for example at the c-level or equivalent, senior level with Board sponsor. This ensures the firm can implement any strategies, allocate resources appropriately and is able to measure progress.

02. Action

The commitments that the firm is publicly signed up to, that will change its business practice and/or industry, including targets and associated data.

Identification of the nominated accountable executive to ensure the firm enacts the vision, including through provision of resources.

03. Question set

Who at the Firm is the accountable executive for Diversity, Equity and Inclusion (DEI) and what are their main responsibilities?
Does the Firm have set targets, objectives or goals for diversity (including process improvements, ways to engage employees or collect data, in addition to commitments aligned to external initiatives)?
Describe the Firm’s targets, objectives or goals for diversity.
a. If there are none, does the Firm intend to set targets, objectives or goals for diversity?
b. Explain why the Firm does not intend to set targets, objectives or goals for diversity.

It's not just numbers

There are many ways to demonstrate commitment and progress. Targets are essential for accountability. Milestones are invaluable to maintain energy as they show the direction of travel is being achieved.

Targets and milestones can be both external and internally focused and communicated.

They can be related to measurable changes in quantitative data. But they can also be changes to process that enable the implementation of improved activities, behaviours and policies. These are the precursors to long-term changes in the measurable data.

04. What we expect to see

Firms should indicate where oversight and accountability lie. It is expected that this will be a member of senior management for example; at the C-level or equivalent, senior level with board sponsor. This role ensures ﬁrms can implement any strategies, allocate resources appropriately and measure progress. There must be appropriate seniority to allow remedial action where there is no progress towards targets. This accountable executive is expected to surface key issues to the right senior forum to obtain buy-in, feedback or create momentum. They should act as a role model for applicable policies or elements of strategy.

Part of this work will be collecting data that can demonstrate the current picture and direction of travel. This can happen through a combination of public targets via external initiatives or regulatory requirements, as well as internally identified targets. Each target should have a rationale and intended outcomes.

Communication of progress against targets and the outcomes being achieved or worked towards will vary according to each firm. However, they should be able to demonstrate whether the target is moving closer or further away, the context for that change and what the intended actions will be.

“The goal of the accountable executive’s work should be to embed culture and values across the organisation and its activities, including by developing objectives or approaches that cover all staff”

05. How to get there

Accountable executive is not a static role; it is one that experiences continuous learning and brings continuous learning to the firm. These may relate to training and development, established and expected standards of behaviour or may relate to performance in applicable roles.

While this accountable executive should be a point of contact for any issues that cannot be resolved through existing formal and informal channels, there should also be an (anonymous and protected) channel for reporting of incidents.

The accountable executive can consider how to be supported by staff from across the business to understand the appropriate benchmarks and measurements. DEI Committees, networks or ERGs, for example, can offer input and help to establish the narrative for why particular targets have been chosen and the activities that will contribute towards them. However, input should come from a spectrum of the business – the topic affects everyone and everyone should have the opportunity to create the firm’s culture. Firms should consider what success looks like, especially with the slow-burn changes, such as creating more diversity at senior levels.

The external commitments that the firm has made will derive from both the support for external initiatives and the real-world impacts that have been articulated in the firm’s purpose, vision and values. Examples could relate to programmes such as Disability Confident, or the Race at Work Charter, or as a Women in Finance signatory organisation. It should be clear if there are specific activities that are required as part of these commitments (identification of targets, disclosures, monetary support, employment programmers, etc). It should be clear if anything has been excluded from scope.