Today, as we mark and celebrate International Women’s Day (IWD) the House of Commons Treasury Select Committee has released a powerful new report entitled “Sexism in the City. But be warned, if you’re hoping for some positive news to start your day, this does not make for inspirational reading. It shows quite starkly that the world of financial services is not doing much at all to follow the theme for today’s IWD to #inspire inclusion. In fact it’s a bit of a shocker.
Why?
The Treasury Select committee reports that he financial services industry is one of the most important sectors of the UK economy. Employing more than 2.5 million people across the UK—over 1.1 million in financial services directly and more than 1.3 million in related professional services—and supporting lots of well-paid jobs, the sector makes a disproportionately large contribution to UK GDP and its £100 billion tax contribution helps fund public services.
The report makes it clear that it is vital therefore that the sector makes the most of the widest possible pool of talent to ensure it is as productive and competitive as possible. All good so far of course.
However, the predecessor Select Committee back in 2018 highlighted the underrepresentation of women in senior positions and the large difference in average pay between men and women in what they call “the well-paid sector” of financial services. It identified a range of barriers faced by women in financial services that contributed to this gender inequity, including poor workplace cultures, unconscious bias and the impact of maternity leave and childcare. The report made a range of recommendations aimed at reducing these barriers and improving gender diversity.
Brace brace… and has much changed?
Now, five years on, The Treasury Select Committee has launched their current inquiry into Sexism in the City to find out how much had changed.
Disappointingly, the answer appears to be “not much”.
The latest report declares that “Many of the barriers identified in 2018 remain stubbornly in place. We heard that many firms still treat diversity and inclusion as a ‘tick box’ exercise rather than a core business priority, despite clear evidence that diverse firms achieve better results. There have been only incremental improvements in the proportion of women holding senior roles in financial services firms, and some sectors have seen no improvement at all. Similarly, there has been only a small reduction in the average gender pay gap in financial services, which remains the largest gender pay gap of any sector in the UK economy”.
Commenting on the report, Professor Geeta Nargund, Chair, The Pipeline, said:
“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.
“Achieving true gender parity in the boardroom – across both commercial and functional roles – is absolutely essential for growth and success across all businesses, including those in the financial services sector. But to drive forward real change, firms need to do more to enable women to truly succeed. Appointing and promoting women is a crucial part of the equation, although it will not work unless firms root out toxic practices and create cultures which are supportive for all employees.
“Steps to tackle harassment in the workspace and close the gender pay gap are vital, and I wholeheartedly support these recommendations. But I would also like to see firms take action to bridge the gender health gap at work – recognising the impact of women’s health issues, and implementing supportive policies for them, alongside training for HR and managers. After all, without supportive structures in place for their female talent, firms will ultimately be the ones that lose out.”
Today, as we celebrate the role of women in finance, it makes for sorry reading to realise that so much needs to be done to improved diversity and inclusion – including gender diversity – in this fantastic world of ours. It’s clear that things really do need to change if we really are to thrive and deliver the best outcomes for everyone. Let’s do our best to try and bring about that change. We’ll all benefit from it in the end if so.
Sharing his views on the report today, Thomas Beale, Head of Workplace Bullying and Harassment at Bolt Burdon Kemp, says:
“Unfortunately, the findings presented in the Treasury Committee’s latest report on Sexism in the City do not come as a surprise. It is disappointing to hear that there have only been incremental improvements since 2018; however, this issue seems to be rooted in the general culture within financial service, and therefore will require a comprehensive and reformative approach.
Whilst the Treasury Committee has taken great initiative, it is industry leaders that must take steps to spur cultural change. The Worker Protection Act 2023 is due to come into force this Autumn, establishing a positive obligation on employers to prevent sexual harassment from taking place. It is hopeful that this development in legislation will encourage City firms to take the necessary action to stamp out the toxic culture that enables sexual misconduct, whilst also providing a new legal avenue for women to obtain justice.”
