A report from the Treasury Committee released this International Women’s Day has provided a strong reminder of the sexism and harassment issues women continue to face in the City of London.
Titled ‘Sexism in the City’, the report called for an end to the “era of impunity” in the fight to tackle sexism and misogyny in the financial services sector.
Though improvements have been made since the 2018 Women in Finance inquiry, the report warned that improvements are happening at “a snail’s pace”.
Chair of the Treasury Committee Harriett Baldwin commented: "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.
“Firms must take responsibility for improving their culture. There have been several high-profile cases which show the existential risk to firms that 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.”
Sexual misconduct worse in financial services
The inquiry showed that 50% of polled women said they had been “sexually harassed or had experienced misogyny in the workplace”.
Amanda Blanc, chief executive of Aviva PLC (LSE:AV.), warned that sexual misconduct is higher in financial services than other industries.
“The numbers, when we did the survey… showed that physical abuse was around 28% in financial services, in the firms that we surveyed, and verbal abuse was 43%. Those are 10 percentage points higher than in other industries. Clearly, there is an issue here,” Blanc stated in the Sexism in the City report.
Having and raising children “is still perceived by many as one of the main obstructions to women progressing in finance careers”.
Fiona Mackenzie, chief executive of women’s advocacy group The Other Half, told the Select Committee: “So many of the women – fantastic, talented people – in the financial services industry are lost at the point that they have children.”
One person was quoted as saying that taking maternity leave could have a worse effect on a woman’s career than an allegation of sexual misconduct would have on a man’s.
On the gender pay gap, professional services firm PwC was quoted: “As at 2022/23, the average pay gap within financial services was 23.7%, compared to 11.7% in all other industries.
“Progress since the start of gender pay gap reporting in 2017 has also been slow, with the gap reducing by only 1.7% over six years for financial services firms (1.1% for all other industries).
“Our calculation is that on this trajectory it will take another 70 years for the gender pay gap to close in financial services.”
Diversity quotas should be scrapped, says report
One of Sexism in the City’s list of recommendations fired a broadside against regulatory interference in tackling the City of London’s diversity problem.
In classic Conservative fashion (Baldwin being a Tory MP), the Committee said the market should do the job without resorting to diversity quotas.
“We recommend that the regulators drop their plans for extensive data reporting and target setting,” read the report.
“In our view, a lack of diversity is a problem that the market itself should be able to solve without such extensive regulatory intervention.
“Boards and senior leadership of firms should take greater responsibility for improving diversity and inclusion given that it should lead to a competitive advantage in the development of talent.
“Firms that perform best on diversity and inclusion and have the best cultures should be able to benefit from the clear business advantages this provides, leaving those that perform badly in these areas to suffer the consequences for their reduced competitiveness and profitability.”
The report did call on individual firms to enhance equality impact assessments and strengthen gender pay gap reporting.
Equality among parental leave for men and women was also recommended.