Released on International Women’s Day (Friday 8 March), the Treasury Committee’s Sexism in the City report examined the state of the City of London’s firms for women at work, six years on from the committee’s first report on the subject in 2018.
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MPs found that little had changed, with many of the barriers to women’s progress identified in 2018 still in place.
The committee stated: “We heard that many firms still treat diversity and inclusion as a ‘tick-box’ exercise rather than a core business priority, despite clear evidence that diverse firms achieve better results. There have been only incremental improvements in the proportion of women holding senior roles in financial services firms, and some sectors have seen no improvement at all.”
The financial services sector’s gender pay gap had seen incremental progress, and remains one of the UK’s largest, the report found. Government data showed the sector narrowing its pay gap just 0.3 percentage points, from 23% in 2021-22 to 22.7% in 2022-23.
Sexual harassment and bullying were likewise still rife, with the lack of change “shocking".
The committee said it was “particularly concerned” by the misuse of non-disclosure agreements (NDAs) to silence victims and force them out of organisations.
Georgina Calvert-Lee, employment law and equality expert at Bellevue Law, told HR magazine that NDAs are all too often included in settlement agreement as standard practice.
“NDAs should never be imposed on employees without careful consideration,” she said.
“They may sometimes be appropriate. When requested by all relevant parties, an NDA allows them to draw a line under the past and move on. The problem, however, is knowing whether the employee’s consent has been freely given or if they feel coerced by circumstances.
“After all, employees considering settlement agreements are usually at their lowest ebb, being on the brink of unemployment, facing a loss of income, benefits and security. They will usually be experiencing stress. Some may even be suffering from mental health injuries.
"If an employer wants to move forward with an NDA, they must think wisely and not use it as a knee-jerk reaction; usually it is sufficient for NDAs to be narrowly drafted in order to cover the discussions around the settlement and the settlement agreement itself, rather than prohibiting the employee from ever talking about their past experiences.”
The report made a number of recommendations, both for firms and for legislators. These include making companies with too large a gender pay gap draw up plans for how they will address the gap, and discouraging firms from asking recruits their previous salaries.
Of particular focus, however, was the recommendation that pressure be put on boards, by both government and regulators, to see through real diversity and inclusion in the sector.
Michelle Last, an employment partner at Keystone Law with first-hand experience advising victims of sexual assault, said that sexual harassment and assault allegations persist across the City, right to the very top.
She added: “With this behaviour coming from the top, what hope can there be further down in the organisation?
“The fact is that much more can be done but isn’t. Genuine change would require bold action. For example, organisations such as the FCA could remove authorisation for FCA-regulated professionals found to have sexually assaulted or harassed a colleague.
“Firms themselves could be subjected to substantial fines if they fail to address allegations of sexual assault or sexual harassment. There is an ever-present sense of ‘himpathy’ in the City, with allegations of sexual assault or sexual harassment all too frequently met with the alleged victims being labelled as ‘money grabbers’.”
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Speaking to HR magazine, she added that HR’s remit in shaping culture was vital to preventing such crimes.
She said: “Culture is led from the top, but is lived through the line-manager experience, and so organisations need to ensure their managers drive that culture forward, and their team operates a professional meritocracy.
"This can be improved by having proper policies and procedures in place and implemented, ensuring managers are properly trained and employees are aware of company policy. Having a transparent formal and informal complaints system is also important, alongside ensuring that no employee is treated differently if they raise a grievance.
“Unlawful ‘banter’, exclusion from the best deals, and sidelining women who have had children can contribute to an exodus of talented women before they reach their true potential.
“It can also lead to employers facing unfair dismissal, discrimination and harassment claims and potentially even personal injury claims if there is psychiatric damage. Such claims can potentially be financially unlimited, or inflict irreparable reputational damage.”
