In a new report published on International Women’s Day, the
Treasury Committee is calling for an end to the ‘era of impunity’
- after MPs find a ‘shocking’ prevalence of sexual harassment and
bullying, and a culture which is ‘holding back women’ in the
City.
The Committee notes there have been incremental improvements
since 2018, for example a
marginal increase in the representation of women in senior
positions and a small reduction in the sector’s average gender
pay gap, but says progress is still far too slow.
The Committee makes recommendations that MPs believe are
essential for tackling sexism and misogyny in financial services,
including:
· 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
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, therefore, calling for a legislative ban on the use
of NDAs in harassment cases.
The Committee heard that firms’ internal whistleblowing
procedures were inadequate, with HR teams prioritising the
reputation of the business over the wellbeing of employees. This
was backed up by evidence showing that 70% of whistleblowers
within financial services were victimised, dismissed or felt
resignation was the only option open to them. The Government
should legislate for stronger protections for whistleblowers in
sexual harassment cases, the Committee recommends.
MPs welcome proposals by the Financial Conduct Authority and by
the Prudential Regulation Authority to strengthen their regimes
for tackling non-financial misconduct, including sexual
harassment.
However, members of the Committee recommend that the regulators
drop costly proposals for businesses to report data and set
targets on diversity. These proposals would not capture the many
smaller firms that have some of the worst cultures and levels of
diversity and could be treated by firms as another 'tick-box'
exercise. The Committee is of the view that boards and senior
leadership of firms should take greater responsibility for
improving diversity and inclusion given the clear business
benefits this would bring.
The Government should ban employers from asking for salary
history, and it should become a legal requirement to include
salary bands on job advertisements, the Committee concludes, as
both play a role in perpetuating a system where women are paid
less than men.
Chair of the Treasury Committee, , 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.
“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.”
