Hello everybody and welcome to today's edition of C&F Talks. It's a great pleasure to have with me today, Mary O'Connor who's a Non-Executive Director at Carne. Mary's going to be joining us to speak at the 10th annual Culture and Conduct for Financial Services Summit, which is being held in London on the 4th of February next year. Welcome, Mary.

Thank you, it's a pleasure to be here.

Very good to have you with us.

Last month the FCA published the results of a survey of a thousand firms on how they manage and record incidents of non-financial misconduct. They have also indicated that they will publish the results of their diversity and inclusion consultation which is likely to incorporate non-financial misconduct into the conduct rules by the end of this year. Do you think that the culture in the city has changed, or is sexual harassment of bullying still commonplace and do you think there's something that regulation can actually affect?

So, I think this is one of the most important areas that the FCA has looked into in recent times.

I think sexism, unfortunately, is a part of society and while I think many firms do a good job you know attempting to ensure that they minimise incidents and respond appropriately to incidents nonetheless, I think this still exists. And it is a blight on the lives of a number of people in the industry, and I think as board members we need to step up to take reasonable steps to prevent non-financial misconduct and having the regulators make clear the expectations around both boards and companies both to prevent it and to respond appropriately to it I think will help to support victims and reduce the levels of it everywhere.

But do you think that the regulation by itself is sufficient, or do you think that there is more that the board and senior management should be undertaking themselves? Is it something so deeply in the DNA of organisations that a wholesale rethink is required of senior management as to how they deal with this issue?

Look, I think the expectations of society in terms of what companies need to do around some of these big issues has changed and I think the regulation is a start, but it isn't the be-all and end-all in terms of what companies have to do. You know, I think it's good that the regulators have set this expectation and will give companies I think some kind of guidance in terms of the things that they need to do to get started, but at the end of the day the responsibility lies with boards and then with the executives to make sure that they are helping people to understand what their expectations are around appropriate behaviour, making sure that people feel safe to be able to speak up, supporting victims when they do speak up and then taking steps to stamp it out. So, I think, look, it's the start, but we all have a lot more we need to do.

Yeah, absolutely.

And in addition to sexual harassment, sex discrimination is still a major issue with women very underrepresented at board level. What do you think leaders can do to address the balance and is positive discrimination quotas the answer?

Oh, look that is the hot topic, isn't it? So, look I think at the end of the day you know there is still very significant barriers to people who are different, you know, whether it be by gender, women or whether it be anyone who is different from the standards.

You know, it is I've heard it described as, you know, having to swim upstream against the current you know whereas if you're a kind of standard person you don't. So, look I think boards and leaders do need to step up, and particularly I think you need to have a focus on getting senior leaders into those women and diverse people into those what I'll call money slap positions, right.

CEO, CFO, COO, head of marketing, head of sales, things where they have P&L responsibility, both from a role modelling perspective and because there's a lot of evidence that says that when you put people who are different in those positions, they then change the system underneath, right, to enable other people to do it.

But, I think, look, it's a leadership issue. People need to understand the value and how to get the value out of managing diverse teams and they need to learn how to do it and want to do it well, and when they do it well right you'll see this benefit, this uplift where people will innovate more be able to do more. But you also have to support people at all levels of the journey.

You know my experience from being a CEO, is that you can't just make a pronouncement and let it happen. You know the reality is it starts from the minute people are recruited. Do people who are different, do women feel comfortable in the recruitment process? Are they given the same levels of training? Are they given the same assignments and opportunities? Are they given the mentorship and the support to be able to be supported throughout it? So, it's a really, every level of your organisation needs to work on this.

Yeah, it's a real challenge isn't it? As you describe them the money positions, the executive positions on the board. I remember seeing some research. I can't remember whether it's the 30% Club or whether it's Women in Banking and Finance, but some research showing that the women are well represented up to the positions perhaps just beneath the board, and then when you look at board composition, yes there are plenty of NEDs, but in terms of executive positions and CEO positions such as among that you yourself have occupied it tends to fall off quite dramatically.

Yeah, that's absolutely true. And I think that's the piece that that you need to break through. You know, I think you know there's some interesting statistics on the authority gap right, that that people are used to seeing leaders of a certain type and anybody who's different from that struggles to get in, and I think we all need to kind of understand that, and support that change.

Because I think you know again the evidence is that when you get people women and other diverse people into those positions they then help bring other people along, right, but not only are they role models you're like okay, if you're a young woman you say I can do it because Mary's been at the top, but also significantly, you know, I understand because when I was a CEO the barriers that I was facing trying to get to that level that I could then take steps to make it easier for other people.

Yeah, because it does appear to be a bit of a cliff edge, doesn't it?

That so, thus far, you know the measures have been taken to try and counter this problem have encouraged women to get to that position of senior management, but what is it that prevents them from the leap from that, as it were, onto main board executive positions? From your experience have you been able to identify what the key block is?

Yeah, well look, I mean, there's a lot of research around it right that would say that that women are judged more harshly on their sort of outputs and their behaviours that than others are, because they're just they're just more scrutinised. And, you know, and I'd say in my experience that that is broadly true, I think you know my experiences have always come up when something is different I always say to people go white, brown or green if you're a woman, because that's been my experience, right, where you're doing something so for instance, you know my first opportunity was out when I was at KPMG, I had to go in to help KPMG separate its audit and non-audit business, only an outsider could do it, so I had this great opportunity, a white space, right, green space where no one is, you know, moving into things like ESG or digital where there are fewer people those are the opportunities or where things are a mess, right, glass cliff is a real thing, right.

And so going to that so I think, you know, those are the sort of obvious things but what I'd like to see is where women are on the planning where they're groomed and mentored in order to be able to be successful in kind of BAU businesses, where you're being set up for success, and you don't have to make it yourself.

Maurice

That's certainly a valuable insight. I mean turning to technology, AI is set to revolutionise traditional organisational structures, how do you think it will impact the culture of financial services firms?

So, I look, it's a double-edged sword like everything, but you know, on balance I think I'm very positive about it. I think that AI has the ability to free up people to spend time doing the things that they're great at, you know developing good relationships, thinking of new and innovative ideas and applying kind of their knowledge and their experience to do things that will maximise the potential of businesses.

But you know at the same time we have to be careful like there's been very many studies that show that, you know, AI if not carefully controlled will reflect the biases of underlying society and the underlying sort of data that gets put into it so we just need to be very careful that we're not reinforcing the bad things rather than opening up the good things.

Absolutely, and are you with those who fear the ultimate form of AI and its potential for harm or do you think it's largely going to be confined to productivity and improving operational performance and taking away some of the tedium of jobs of all kinds, at all levels. But when it comes to perhaps moving into decision making at an increasingly senior level, do you think that that poses a threat to the career opportunities for people aiming for board level?

Yeah look, on balance again I think I'm quite positive on it. I think at the end of the day you know this is a tool that we should be using controlling thinking using thoughtfully, right in order to enhance what we do rather than to take away from what we do. You know, the reality is I think data is always your friend if you can really understand what's going on you know when you want a really big company, which I have.

You know, the biggest issue is that you're trying to get down into understanding, you know, what is it my customers really want, why is it they really want to buy something or not buy something or, you know, what are the trends that are happening that are interfering with them or creating opportunities for them, and ultimately the better we understand that the more that we can open up those opportunities.

But I think we have to do it thoughtfully and I don't think that the move through AI will happen as quickly as everyone is saying, because I do think you know you'll have to put some thought into it and to ensure that we're taking the good parts and not reflecting the bad parts.

I'm an optimist, I agree with you. I think that's probably all we have time for.

For our viewers, very much hope you will be able to join us in person on in London on the 4th of February to attend the summit to hear further from Mary, and from all the other speakers we have speaking. Just remains for you to say, Mary, thank you very much for sharing those thoughts with us today.

Oh, thank you, it's a pleasure to be here.