Senior leaders and board members at companies should take responsibility for addressing these issues and changing the culture, a parliamentary report concluded, while also urging men to take a more active role in challenging and reporting sexual harassment by other men.
Legislators began their so-called “Sexism in the City” investigation after allegations of sexual misconduct against hedge fund titan Crispin Odey forced him out of his firm last year. They also found that “not much” had changed in boosting gender diversity and improving poor workplace cultures in the industry since 2018, when there was last an inquiry on the role of women in finance.
“It is shocking to hear how prevalent sexual harassment and bullying, up to and including serious sexual assault and rape, still are in financial services, and how poorly firms handle allegations of such behaviors,” according to a report published on Friday by the UK Parliament’s Treasury committee.
‘Systemic risk’
NDAs, which prohibits signatories from sharing information with a third party, were widely used to cover up allegations of abuse, the report said, and their use should be made illegal in sexual harassment cases. The legislators urged the government to introduce legislation to ban their use in harassment cases. It’s the second group of legislators this year to call on the government to end the use of NDAs in sexual misconduct cases after a separate inquiry into misogyny in the music industry.
Since the inquiry launched in July, members of parliament have heard evidence from women facing behaviour ranging from inappropriate comments to assault, and the subsequent failure of systems meant to ensure accountability.
“For firms that don’t get this right, you know, it can actually cause businesses to unravel and actually, potentially be a systemic risk,” Harriett Baldwin, chair of the committee, said in an interview on Bloomberg Radio, reiterating concerns over company failures to tackle sexual misconduct. There have been some “high profile cases where you could see that that might be the case”, she said.
The committee urged the financial regulator to collect data on the use of NDAs by regulated firms in cases of non-financial misconduct to get a clear picture of “the extent of their use in financial services in harassment cases, which could provide valuable evidence to support further action.”
The committee also recommended:
- All firms be required to equalise their offer of parental leave for men and women, and advertise jobs on a flexible and part-time basis.
- Introduction of new legislation on pay transparency, including advertising salary bands for jobs and a ban on employers asking about previous pay.
- Companies with pay gaps above a certain threshold be made to explain why and detail a plan to address it.
- Financial firms with as few as 50 employees be made to report their gender pay gap, compared with 250 currently.
- The financial regulator launch an awareness campaign for its hotline to report sexual harassment.
Too costly
However, legislators said a plan by financial regulators to require firms to collect and report workplace demographic data and implement strategies to address diversity problems would be costly for companies and could become a box ticking exercise, rather than driving real change.
Instead, they said firms should sign up to the voluntary Women in Finance charter, signatories of which must show intent to link senior executive pay to the gender diversity of a company. The move is likely to be seen as a win by financial firms, after the industry body had baulked at some of the proposals for more transparency because of the cost burden.
Such suggestions are “slightly inconsistent with the rest of the tone of the report,” said Alesha De-Freitas, director of policy for gender equality charity the Fawcett Society. “There are some businesses which are not making change on their own — and I think that’s really clear to see from the data.”
