As the US administration’s approach towards diversity and inclusion sparks a wave of concern, UK companies that abandon their diversity and inclusion policies risk facing increased legal scrutiny and potentially costly lawsuits.
The Consequences of Ditching Diversity and Inclusion Policies
Employers who follow the lead of large US corporations by rolling back diversity and inclusion initiatives may be increasing their risk of lawsuits. This warning comes from the ‘Employment Lawyers Association (ELA), which has 7,000 members’.
The Importance of Diversity, Equity, and Inclusion Policies
Defending a company against discriminatory acts made by an employee is already challenging, but without diversity and equity and inclusion (DEI) policies in place, it would be virtually impossible. Employers are legally required to take all reasonable steps to prevent ‘sexual harassment, among other forms of discrimination’.
Diversity, equity, and inclusion (DEI) policies are guidelines that promote a culture of inclusivity within organizations.
These policies aim to eliminate biases and promote equal opportunities for all employees.
According to a study by McKinsey, companies with diverse workforces are 35% more likely to outperform their less diverse peers.
DEI policies typically include training programs, diversity metrics, and accountability measures.
The Impact on UK Businesses
UK law mandates equality, but unlike US legislation, positive action measures have never allowed employers to use protected characteristics, such as gender or religion, as a selection criterion. Instead, employers can only use these characteristics as a tie-breaker when candidates are equal. In the UK, it would be unlawful to hire someone simply because they belong to a particular group.
The Risk of Adverse Findings
If UK companies roll back their DEI policies in response to the US administration’s approach towards diversity and inclusion, they will increase the risk of adverse findings of discrimination against their business. This could lead to costly lawsuits and damage to their reputation.
The Bank of England‘s Response
While some employers may choose not to implement new diversity and inclusion rules, regulatory bodies such as the ‘Prudential Regulation Authority (PRA)’ and the ‘Financial Conduct Authority (FCA)’ are supporting voluntary industry initiatives aimed at increasing diversity and inclusion in the financial sector.
- theguardian.com | UK firms ditching diversity and inclusion ‘face higher risk of lawsuits’
