reflecting diversity, choosing inclusion speech given by mark carney, governor of the bank of england court room, bank of england 9 february 2017 i am grateful to jennifer nemeth, anne wetherilt and iain de weymarn for their assistance in preparing these remarks, and to richard galletly, cat hines and daniel nixon for background research. all speeches are available online at www. bankofengland. co. uk / speeches and there were never, in the world, two opinions alike, no more than two hairs, or two grains ; their most universal quality is diversity. ( michel de montaigne, essais, book ii, chapter 37 ) introduction the bank of england recognises that to pursue its mission it must reflect the diversity of the people it serves. that has not always been the case. historically, there were times when this institution was run by the city for the city. our first female court member, frances heaton was only appointed in 1993, while our first black, asian and minority ethnic ( bame ) member, lord morris, followed five years later. ten years ago our th graduate intake was drawn from just 11 universities. and i am the 120 in a very long line of male governors of the bank. frequent charges levelled at this central bank – like many of our peers – include being mono - culture, secretive and ridden with groupthink. those charges began to lose their force in the face of significant efforts by my predecessors. but despite that progress, when the bank was reunited with the pra we knew that we still had to do much, much more. so three years ago we made diverse and talented a central pillar of our first strategic plan. we value diversity for at least three reasons. first, it is the right thing to do ; a public institution should seek to reflect i the public it serves. second, it helps to build the trust we need to deliver our remits. third, it is well established that diversity leads to more creative thinking and reduces the risks of groupthink and bias. it isn ’ t enough for us to reflect diversity, however ; we need also to choose inclusiveness. inclusiveness unlocks the true value of an organisation ’ s diversity ; through inclusion people can realise their full potential. that ’ s why as we increase the diversity of the bank, we are focussing on building a culture that values diverse ideas, encourages open debate, and empowers people at all levels

to take initiative. since these two ideals go hand in hand, today i will reflect on both diversity and inclusion : what they mean, why they matter, and how they are best delivered in a modern central bank. the what there are two main types of diversity – identity and cognitive. gender, ethnicity, age, disability, sexual orientation, education are all identity factors, which can be ii measured, targeted and their impact assessed. as i will discuss in a moment, we have introduced diversity targets for the first time. all speeches are available online at www. bankofengland. co. uk / speeches the bank is also seeking to increase our cognitive diversity, which shapes our perspectives – how we think about problems and solve them iii cognitive diversity doesn ’ t lend itself to targets. but it ’ s no less important. iv research shows that while older colleagues often view diversity as an issue of representation and fairness, millennials tend to view cognitive v diversity as essential for a diverse and inclusive organisation. this younger generation is interested in connecting with each other, collaborating across teams and exploring a variety of ideas to solve problems. that ’ s not just interesting, it ’ s necessary. the spirit of the millennial is better suited to the complex challenges that central bankers face in a risky and uncertain world. so our commitment to diversity cannot only be about meeting targets. it must promote an environment that brings cognitive differences to the fore, and it must create a culture where everyone can maximise their potential. we need a richness of ideas and perspectives that are exchanged in the pursuit of clear goals under an overarching mission. this is the crux of inclusion : an organisation where people feel empowered, enabled and engaged in pursuit of a common goal. the why increased trust as a central bank, we need to be understood, credible and trusted for our policies to be most effective. the bank ’ s work often requires deep technical skill and knowledge. not everyone wants to be steeped in fan charts ; modelling and stress testing. yet the decisions we take impact every uk citizen. how can they rely on us – the dreaded experts? of course, trust can be built through a track record, but it can also be grounded in familiarity. people trust vi individuals, places and things that they know. reflecting the diversity of the people we serve can reduce misperceptions that we are experts making esoteric decisions in an ivory tower for the benefit of others. moreover, diverse decision - making bodies typically have