MP’s have found a ‘shocking’ prevalence of sexual harassment and bullying in the financial services industry.
The Treasury committee's Sexism in the City inquiry was launched to see how the financial services industry has changed since 2018 when the previous Treasury committee highlighted a range of barriers faced by women in the sector.
According to the inquiry many of the barriers identified in 2018 still remain ‘stubbornly’ in place with many firms still treating diversity and inclusion as a ‘tick box’ exercise.
The inquiry also found there has only been an incremental improvement in the number of women holding senior roles and a small reduction in the gender pay gap with financial services still having the largest disparity in pay of any sector in the UK.
The committee has called for a legislative ban on non-disclosure agreements (NDAs) to be used in harassment cases after finding they were being mis-used to ‘cover-up’ abuse, sexual harassment and discrimination and leaving perpetrators unpunished.
It is also called for stronger protections for whistleblowers in sexual harassment cases after evidence showed 70 per cent of whistleblowers within financial services were victimised, dismissed or felt resignation was the only option open to them.
The committee also made recommendations on the following:
- Banning prospective employers asking for salary history
- Legal requirement to include salary bands on job adverts
- Reducing 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 having to explain the disparity and publish an action plan
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.
“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.”
Role of regulators
The committee also said government and financial regulators have an important role to play in driving change and combatting sexual harassment and bullying.
The FCA’s proposals to strengthen its non-financial misconduct rules and enhance its ability to take action against individuals in sexual harassment cases, including to prevent ‘bad apples’ from being able to roll from job to job as they are able to do currently, was welcomed by the committee.
However, it said it was concerned by the regulator’s proposals to require firms to implement strategies, collect and report data and set targets stating firms should have already been doing this.
The committee said these initiatives would likely be treated as another ‘tick-box’ exercise and would not apply to smaller firms with fewer than 250 employees where it said evidence suggested the cultures were worse.
