Coinciding with International Women’s Day, The Treasury Committee’s “Sexism in the City” Report published today makes for a disappointing (but unsurprising) read. It concludes that “not much” has changed since they last took an in depth look in 2018 and there is much to do to tackle toxic workplace culture and drive change through diversity and inclusion initiatives which have the most impact.

The stats are bad (and it’s not just financial services in the City)

Research undertaken by Fox & Partners shows the disparities faced by women in the financial services sector.  In 2022, women made up 15.1% of partners in financial services partnerships (virtually unchanged from the year before). In 2023, women held 8% of Chief Executive roles in financial services. Women make up over 60% of the legal profession. Only 35% of partners are women (up only 4% in the last 10 years).

Tackling this is not just about one thing

Comparing our research with previous years, at the current pace it could take up to 70 years for gender parity to be achieved across senior leadership roles in the UK’s Financial Services sector.

This needs to be addressed as a priority: It is essential that we all live and breathe the need for change and have an ever present dialogue about how we achieve it.

Women in leadership is only part of the picture. “You can’t be what you can’t see” is a powerful statement and the need for women to be in positions of seniority to inspire others is essential, but it is overly simplistic. Approaching this like a “tick box” exercise doesn’t work. The drive to increase female leadership on boards, in 2023, resulted in over 90% of the 426 female directors at FTSE 100 companies holding a non-executive role. Put simply, this does not translate to the right people in right places to promote change and it does not address the need to remove barriers to progression for talented women  at the start of their careers. There is so much to say but here are some thoughts on the oft cited components and some limitations if addressed in isolation:

  • Gender inequality in the workplace is a complex and multifaceted issue – a broad range of measures are needed to bring about meaningful change. Measures to target sexual harassment are different to those needed to address the barriers to promotion arising from women’s disproportionate responsibility for childcare, especially for young children. It is vital that society tackles all the issues and focuses on positive change.
  • Policies against discrimination and whistleblowing – essential to set the tone but lacking unless they are lived and breathed by the organisation. That means ongoing training on all aspects of equality, including psychological safety,  promoting safe channels for issues to be raised and driving consistency in responses is essential in achieving cultural change.
  • Leading from the top – there is an inevitable burden on women and other poorly represented groups to discuss their experiences but this needs to be shared by allies. Employers should promote and encourage a supportive and inclusive culture, with senior leaders championing such behaviour and being trained and encouraged to call out inappropriate behaviour. Leaders should not recruit and promote progression in their own image but enable freedom to pave new ways of working and promote flexibility. Are we clear with our teams about what needs to be achieved, in what timeframes and about how they want to work to meet those shared objectives?
  • Banning NDAs – The practice of using confidentiality clauses and non-disclosure agreements to conceal allegations of sexual harassment or other serious misconduct has rightly come under the microscope. It is clear that when used improperly they can enable an undesirable culture. However, a fair balance needs to be struck between the important aim of preventing misuse and allowing freedom of parties to reach an agreement, particularly where confidentiality may be an important component for all involved. Banning NDAs alone will not result in a more inclusive/discrimination-free workplace and potentially acts as a deterrent to speaking up where a commitment to a long, public and expensive dispute may present as the only route available. Again, there is a danger in the adoption of an over-simplistic measure rather than a wider dialogue on these competing considerations.
  • Rewarding contribution – acknowledging the importance of financial contribution, we must celebrate and reward wider contribution in remuneration structures and be transparent about what is needed to progress. The Treasury’s report suggests strengthening requirements for linking executive pay to the delivery of diversity targets. This is a tangible way to ensure that senior leaders have an incentive to continue to focus on diversity.
  • Regulation – In recent years regulation is unquestionably doing its bit to drive change and hold those in senior positions accountable for perpetuating a toxic culture which stifles progress in diversity and inclusion. The FCA and PRA’s emphasis on misconduct outside of the workplace and focus on non-financial misconduct and its relevance to fitness and propriety and regulatory references is certainly paving the way to change. In turn, organisations must implement proper processes to investigate and enable robust responses, including where there is retaliation, through training.
  • Measuring progress – The FCA and PRA’s proposals also include measures for larger firms to set targets and to measure and report on diversity and inclusion year on year, to demonstrate progress. Perhaps surprisingly, the Treasury Report does not support this proposal, noting that it risks a tick box approach and does not apply to smaller firms which arguably have more issues with gender equality. While it is true that targets and statistics alone cannot resolve the issues, they do play an important role, both by highlighting internally areas of concern but also by providing an important external pressure to address problems and do better to avoid falling behind peers.
  • Positive steps to promote change – Dealing with bad behaviour, while undoubtedly important is only part of the solution. We also need to see employers embracing a wide range of smaller measurers which, collectively, have the power to bring about real change. The Treasury Report gives some suggestions: steps which can make a genuine difference to working women include the publication of family friendly policies, the inclusion of a salary band in job adverts, the offering of more generous paternity and parental leave policies and the setting up of networking and support groups.

The adoption of positive measures, together with tougher sanctions to tackle harassment and discrimination, are what is needed to make real progress. So let’s implement where we can and keep talking about how we create an environment where stereotypical assumptions and unacceptable behaviours (from pulling up our children if they think only boys can be doctors/lawyers/firefighters to sexual harassment in the workplace) are called out in an appropriate manner and we can all feel inspired by the prospect of a more level playing field.

#inspireinclusion #iwd