Bank of England badly needs more diversity but the Treasury is getting in the way

Treasury Committee chair Nicky Morgan has written to the Chancellor to ask what is being done to make the Bank's top committees less monochrome and male 

James Moore
Chief Business Commentator
Friday 20 October 2017 09:28
The Bank of England's governor Mark Carney recognises the value of a diverse workplace
The Bank of England's governor Mark Carney recognises the value of a diverse workplace

It’s nicknamed the old lady of Threadneedle Street, but the Bank of England’s top roles, and its two most important committees, are almost entirely filled by old(ish) white men.

There are 21 positions on the Financial and Monetary Policy committees. All the members of the ‘home team’, four of whom sit on both, are from that group. As for the external membership, the FPC’s membership is all male, and just one of them is non white. The MPC is monochrome, with just one woman, down from two.

That makes Nicky Morgan, the first female chair of the Treasury Select Committee, cross, and rightly so. So she’s written to the Chancellor, Philip Hammond, to ask what he’s doing about it.

Sadly, Mr Hammond might not be the most sympathetic of ministers for her to have to approach, at least if there is even a smidgeon of authenticity in the reports about his comments concerning female train drivers. However, they were rather obviously leaked by his extremist Brexiteer colleagues, whose relationship with the truth is somewhat flexible. So we have to take that story with a pinch of salt.

Perhaps there is a chance for him to redeem himself here.

The Treasury hires the top executives at the Bank and appoints nearly all of the members of its top committees too, so the buck stops with Mr Hammond. The Bank itself is responsible only for the chief economist (MPC) and the executive director, financial stability (FPC).

While it should be noted that neither Andy Haldane nor Alex Brazier contribute to their respective committees' diversity, elsewhere there is evidence that the Bank is doing better. Its performance in staff surveys when questions about diversity are asked have improved, for example, and, crucially, it has set itself targets aimed at broadening the range of people who join it. At the entry level, it hires from a much wider spread of universities than previously. Measures such as making use of blind recruitment panels have helped with correcting unconscious biases that recruiters might have.

The Bank's governor, Mark Carney, spoke earlier in the year of the importance he places on improving diversity, and not just because it is the right thing to do, or because the millennials who will make up the next generation of leaders expect it.

A diverse workforce will help the Bank to avoid the tendency among its people to slip into groupthink, a dangerous thing for a central bank charged with ensuring financial, monetary and economic stability. An organisation reliant on the brains of its people will do a better job if it can secure the broadest possible spread of perspectives.

The standard complaint that the Treasury might come back with, at this point, is that it isn’t always very easy to find the right people for top jobs in a finance and economics, because the pool of candidates from which it has to hire is overwhelmingly white, and male. And able bodied.

That, however, will never change until someone takes a lead. If the Treasury won’t do that, and set an example with the Bank, why should anyone else?

Perhaps it’s time to second some of the people involved in recruitment there to the Bank for lessons in the value of modernity. The Chancellor himself might benefit from spending a week or two there as well, although given the firefighting he's engaged in thanks to the behaviour of his colleagues, he can probably be excused.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

View comments