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.
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 greater political support and enjoy greater public trust. vii  They also tend to achieve better policy outcomes through better understanding of community needs  and more effective dialogue with the wider population. viii  Better decision making, innovation and adaptability  Homogenous groups that pay insufficient attention to minority views are vulnerable to biases, groupthink and over optimism. They are more likely to be influenced by the way information is presented (framing); and to stick with under-performing projects because of prior investments. ix  3  All speeches are available online at www.bankofengland.co.uk/speeches  3  Diverse groups can overcome these ills as they are more inclined to consider novel ideas and challenge each other, enabling them to infer cause and effect and to solve problems better. Diverse teams are also better able to adapt to changes and are more resilient.