An influential group of MPs has hit out at the City’s “alpha-male culture” and called for clearer bonus criteria and senior men to take up flexible working in order to boost women’s prospects.
A report by the Treasury Committee cited a yawning gender pay gap and bonus negotiations – where men can receive bigger rewards by arguing more forcefully – as evidence of a male-dominated culture in the Square Mile.
This, the report argues, is the “overwhelming reason” for women failing to take up senior roles.
Committee chairwoman Nicky Morgan said: “The reporting of gender pay gaps at financial services firms confirms that a large gap exists between men and women working in finance, in part due to significantly more men than women in higher-earning and more senior positions.
“The benefits of gender diversity are highlighted in the report, including better financial performance, reduced groupthink and more open discussions.”
The report added that unconscious bias has affected senior recruitment, as “masculine” language and requirements for a degree, or to work certain hours, can deter female candidates.
Companies should re-examine promotion policies and only list requirements that are strictly necessary for the job, the committee said.
The 51-page report – which includes insight from senior industry figures including Virgin Money chief Jayne-Anne Gadhia and M&G Investments boss Anne Richards – also calls on senior men to tackle the stigma associated with flexible working, which is perceived as a “female” approach and can knock career progression.
Senior men are being urged to “lead by example” by working flexibly themselves, helping displace a culture of presenteeism where staff unnecessarily work long hours in the office.
The committee went on to single out industry regulators – including the Bank of England and Financial Conduct Authority (FCA) – for a lack of diversity and their own gender pay gaps, which “show similar trends” to the financial services sector.
The average gender pay gap among banks and building societies is around 35%, while that figure balloons to 52% for bonuses.
Last month, Bank of England deputy governor Ben Broadbent was accused of sexism and forced to apologise for a “poor choice of language” after the described the UK economy as “menopausal” in an interview with the Telegraph.
The Treasury has also had to defend itself after failing to appoint a woman to the Bank of England’s interest rate-setting committee, despite having drawn up a female-dominated shortlist.
There is only one woman on the Bank’s nine-strong rate-setting committee – Silvana Tenreyro.
Chancellor Philip Hammond has been urged to take a stronger stance on gender pay gap reporting, which is currently restricted to companies with more than 250 employees, and excludes partners who are paid differently than employees.
While Economic Secretary John Glen has called the exemption “outrageous”, Mr Hammond has been more muted in his response.
The committee said it “would like to see the Chancellor of the Exchequer as vociferous as the Economic Secretary”.
The Government should also continue promoting the Shared Parental Leave scheme – which allows parents to share childcare but has had a very low take-up rate – and encourage girls to study relevant subjects which put them on a path to the financial services sector, the committee said.