SENIOR women in the City today spoke out against a mostly hard-hitting investigation by MPs into sexism in the Square Mile.
A six-month investigation led by Treasury Committee chair Harriet Baldwin said efforts to tackle sexism in the City are moving “at a snail’s pace”.
While this was welcomed, women who work in finance say the report amounts to little more than “hand wringing” with maternity leave still a major barrier to career progression.
Professor Geeta Nargund of gender diversity consultancy The Pipeline told the Standard:
“In 2024, it is unacceptable – but unfortunately, not surprising – that sexism is still rife in the City. The sad reality is that women still face unfair and unnecessary additional barriers in their pathway to the top; and the glacial pace at which gender parity on boards is improving highlights the full extent of these.”
The report notes there has been a “marginal increase” in the representation of women in senior positions and a small reduction in the sector’s average gender pay gap.
The Committee recommendations include:
- · Legislation to ban the use of non-disclosure agreements (NDAs) in sexual harassment cases
- · Stronger protections for whistleblowers in sexual harassment cases
- · Ban on prospective employers asking for salary history
- · Legal requirement to include salary bands on job adverts
- · Reduce the size threshold for gender pay gap reporting from 250+ to 50+ employees for firms in the financial services sector
- · Businesses with wide gender pay gaps must explain the disparity and publish an action plan
- · Regulators should drop their plans for extensive diversity data reporting and target setting
- · Changes to the Women in Finance Charter including strengthening the link between executive pay, and performance on improving diversity
Chair of the Treasury Committee, Harriett Baldwin, said: “The UK’s financial services sector is the crown jewel of this country’s economy – admired by the international community and always takes pride in being ahead of the curve. This well-paid sector will only be able to maintain its competitive advantage if it is able to draw on the widest possible pool of talent. That’s why it’s so frustrating that efforts to tackle sexism in the city are moving at a snail’s pace.”
Susannah Streeter, head of money and markets, Hargreaves Lansdown said: ‘’While this report is welcome, it still mounts up to just more hand wringing about the state of sexism in the City without a concerted plan of action to stop it. Misogyny within firms is likely to continu, without more penalties and guardrails to stop it and it looks less likely that market forces will effect the necessary change alone.”
Big banks admit that they lose talented women because of cultural issues and insist they are trying to put things right.
During the inquiry, MPs heard how NDAs are being misused in the sector to ‘cover up’ abuse, sexual harassment and discrimination - leaving victims silenced while perpetrators go unpunished. The Committee is calling for a legislative ban on the use of NDAs in harassment cases.
Eleanor Rowswell, partner at law firm Farrer & Co, said: “NDAs are still commonly used within settlement agreements on an individual leaving a firm and in some – though by no means all – cases are desirable for all parties, including the victim of harassment (who may want a firm to keep confidential the allegations that the victim has raised). In any event, NDAs will not override a firm’s regulatory obligations to provide a regulatory reference and, where appropriate to, disclose misconduct to a new employer. This means that hiring firms will be aware of any findings of misconduct before taking on new staff, and where they still decide to make a hire notwithstanding a previous conduct issue highlighted in a reference, would be well-advised to ensure that the individual undertakes appropriate training to address any concerns that may have been flagged in the reference.”
Baldwin, the Tory MP for West Worcestershire, thinks banks themselves need to do more.
She added: “Firms must take responsibility for improving their culture. There have been several high-profile cases which show the existential risk to firms who don’t tackle sexual misconduct. We also know that more diverse organisations perform better, so inaction is not only immoral but bad for growth and business.
“Regulators and the Government also have a role to play but they need to think carefully about what will deliver the best outcomes and avoid introducing tick-box exercises.”
Evidence gathered by the committee shows that 70% of whistle-blowers within financial services were victimised, dismissed or felt resignation was the only option open to them.
