On 10 October, the Commission de Surveillance du Secteur Financier (CSSF) launched a survey on diversity matters within the management bodies of less significant credit institutions (“LSIs”) of the financial sector. According to Article 38-2(8) of the Law of 5 April 1993 on the financial sector, as amended, (“LFS”), credit institutions must engage a broad set of qualities and competencies when recruiting members to the management body and, for that purpose, they must put in place a policy promoting diversity within the management body.
This is the second survey exercise launched by the CSSF as the competent authority to verify these requirements. The first was launched in April 2023 to collect information from over 46 institutions and gain more insights on implementing the diversity target.
Some conclusions of this survey:
- 24% of LSIs reported that they had no diversity policy in place.
- Of the companies reporting having diversity policies, over 91% of diversity policies promoted diversity in terms of gender, 97% of them declared to take age into consideration and 91% the geographical provenance.
- 40% of LSIs did not implement career planning aspects and measures to ensure equal treatment and opportunities for staff of different genders.
- 32 LSIs declared having a diversity policy promoting diversity in terms of gender, but 26 had little or even no representation of the under-represented gender within their management bodies.
The CSSF urged those with no diversity policy to comply without delay. Suppose the CSSF notes the absence of any diversity policy. In that case, it will take strict measures or even impose sanctions and inform non-compliant entities that, moving forward, ‘’[the CSSF] will closely monitor progress in the implementation of diversity by regularly conducting surveys and checks and will take strict measures or even impose sanctions.’’
The CSSF has only applied this assessment to LSI at this stage, but it is expected to cover all other organisations under its supervision soon.
The survey is further evidence of how ESG aspects are moving towards mandatory compliance and how local supervisory authorities can implement sanctions in case of non-compliance with the requirements of the law. You can access the survey results here: Diversity – A CSSF evaluation through a data collection analysis – CSSF
Complying with CSSF diversity standards
Diversity matters are essential to ESG, covering elements such as gender, age, geographical and ethnic origin and educational and professional background. When developing the policy, it is vital to analyse the legal requirements, identify the key risks and opportunities in the organisation and establish a short-, medium- and long-term strategy.
Additionally, communication with stakeholders is crucial, as employees, consumers and investors, among others, demand the results of the diversity measures taken, which is also an obligation for many companies under the CSRD.
Bolder Group recommends that you have the policies in place. If you have any questions about what these policies should be comprised of, reach out to us for expert advice on ESG and sustainability matters.
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