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Non-Financial Misconduct

A workplace free from sexual harassment, bullying, and discrimination should be the norm, but evidence shows this is still far from reality, particularly in the finance sector. Non-financial misconduct (NFM) isn’t just an HR issue; it’s a serious business risk that undermines trust, damages culture, and exposes firms to regulatory and reputational fallout.

The FCA will soon include NFM in its Conduct Rules (from September 2026), and the Employment Rights Bill will require firms to take proactive steps to protect employees and restrict the use of NDAs. To help our member firms stay ahead, the Diversity Project has developed a guidance for its members and 10 Guiding Principles with clear outcomes and actions to embed accountability and best practice across organisations.

10 Core Principles

Principle 1 with icon for Inclusive and Respectful Culture
Principle 2 – with icon to demonstrate Early Action & a Robust Response
Principle 3 – with icon for Leadership & Board Accountability
Principle 4 – with icon for Empowerment Through Training & Access to Resources
Principle 5 with icon for Trusted Reporting Mechanisms
Principle 6 with icon for Fair and Independent Investigations & Disciplinary Hearings
Principle 7 – with icon for Protection & Support for All Parties
Principle 8 – with icon for Decisive Post-Investigation Action
Principle 9 with icon for Continuous Monitoring & Learning
Principle 10 – with icon for Recovery & Reintegration

Example Outcomes and Actions

In our full guidance, available to Diversity Project member firms, we outline the outcomes and actions for each principle. Below is an example of the outcomes and actions for Principle 3: Leadership & Board Accountability.

To gain access to the entire document, as well as further resources – get in touch to become a member: [email protected]

Outcomes

  • Conduct and culture metrics are included in performance and remuneration assessments for leaders and managers.
  • The board holds explicit accountability for oversight of non-financial misconduct.
  • Reporting structures protect the independence of investigations and ensure serious cases are escalated appropriately.
  • Regular, confidential reporting is provided on complaints data, trends, and cultural indicators. This is shared amongst executive and the board.
  • Serious allegations involving senior individuals are assessed for regulatory notification, ensuring confidentiality and duty of care at all times.

Actions

  • Leaders receive training designed to strengthen inclusive leadership and reinforce accountability.
  • Boards are regularly briefed and trained on their legal, regulatory, and governance responsibilities.
  • Firms review reporting and escalation structures to ensure appropriate independence and oversight. For example, consider whether HR reports direct to the board.