The question keeps arising is there enough being done to give women opportunities in senior roles in companies, particularly in finance, on an equality basis with men. The first stage is to accept that some gender bias exists, still, latent as it may be, and at times unintentional and despite well-intended policies and pledges from leaders in the financial sector. The argument for equal opportunity and reward is not just to assert a moral right but a practical one.
The more diverse an organisation, the more innovative it tends to be in terms of improving the quality of its inputs and outputs. This month will be one year since the government’s Treasury Committee published its report on Women in Finance. But has anything happened over this period to provide hope for change? It was in 2015 that the government had appointed Jayne-Anne Gadhia — former CEO of Virgin Money UK and considered one of financial services industry’s most senior women — to lead a review on women in financial services.
In response to her findings, it launched the Women in Finance Charter, which required signatories to build a more balanced and fairer services industry.
More generally, since April 2017, employers with more than 250 staff have been required to publish their gender pay gap, which is the percentage difference between average hourly earnings for men and women. This is the background against which the Treasury Committee launched the enquiry and it heard from Gadhia, recruitment experts, financial services firms, and government ministers.
When the report was published last year, the Treasury made a series of recommendations to the government and regulators to encourage the progression of women to senior levels and reduce the gender pay gap. One of the conclusions was that the gender pay gap exists in part due to significantly more men than women in higher-earning and more senior positions. To rectify this, firms should set out how they will abolish their gender pay gap and support the progression of women.
In financial services firms in particular, the culture remains a deterrent for women, especially in terms of bonuses and working hours. Financial services companies need to focus on changing this if they are to narrow the gap. This will of course take time and isn’t a quick fix, but the pace of change is still concerning. As a Bloomberg headline stated last month, “second year of UK gender pay gap reporting indicates little has changed so far.”
For the finance industry specifically, some of the data makes shocking reading. Major banks, Barclays, Lloyds and Clydesdale, for instance, reported a median hourly pay gap of at least 38 per cent, putting them in the top ten worst offenders in the UK for employers with over 5,000 staff. It shows that women in the financial services sector were — on average — paid 81.9p for every pound that men earned in 2018. This is a slight improvement on 81.6p in 2017, but any disparity is still too much.
According to former Tory cabinet minister, Nicky Morgan, chair of the Treasury Committee, it’s time now for maximum transparency on this issue — for the finance industry and beyond. While gender pay gap data is published on the government’s website, a clear league table is needed. This would provide vital information enabling recruits to compare how companies perform.
Furthermore, the table could include firms’ policies, such as on maternity, paternity and flexible working, that would offer recruits information about a working environment which they often won’t be aware of until they have been hired. The inaccuracy of the data submitted by companies is also a cause for concern. There should be an audit of submission to ensure that the picture we see is indeed the correct one.
A year since the publication of the report, the committee will not let up on this issue. It is continuing to monitor the evidence, asking witnesses to explain any gender pay gap that the organisation they are representing may have, and also looking at the lessons to be learned from best practice.
The Treasury Committee will hold a “one year on” session this month on what has changed. And it is beginning to explore what work it can do around other forms of diversity in finance. The benefits of diversity are clear: better financial performance and more open discussions. Morgan says the Treasury Committee will do all it can to improve all forms of diversity in finance.
(The author is our foreign correspondent based in the UK. He can be reached at firstname.lastname@example.org)