Sexism in the City report calls for culture change in FS sector

The UK Treasury Committee has published its report into the how the Financial Services sector works for women. The inquiry was launched to see how the financial services industry has changed since 2018 when the previous Treasury committee highlighted a range of barriers faced by women in the sector. The Committee’s view is that there has been a disappointing lack of progress in the FS sector since 2018 with many firms still treating diversity and inclusion as a ‘tick box’ exercise. Their central message is there needs to be a fundamental culture change within many firms across the sector, a point endorsed by the FCA. We’ll speak to a D&I specialist about how to make that change.  

FT Adviser reports on this with their headline ‘Shocking' prevalence of sexual harassment in financial services.’ The inquiry found there has only been an incremental improvement in the number of women holding senior roles and a small reduction in the gender pay gap with financial services still having the largest disparity in pay of any sector in the UK.

The committee made a number of recommendations including: 

- Banning prospective employers asking for salary history  
- Making it a legal requirement to include salary bands on job adverts
- Reducing the size threshold for gender pay gap reporting from 250+ to 50+ employees for firms in the financial services sector; and
- Ensuring that businesses with wide gender pay gaps having to explain the disparity and publish an action plan.

In response, the FCA said it welcomed the committee’s feedback on its proposals and agreed it had an important role to play.

On cultural change, the Committee spells out its concerns in the introduction to the report. They say:

“Overall, there has been a disappointing lack of progress on sexual harassment and bullying, including serious sexual misconduct. Despite the best efforts of some far too little progress has been made and serious problems which should have been rooted out still persist. Significant concern remains, however, about the overall culture prevalent within the sector that holds back progress for women. While this Report deals with various challenges experienced by women in financial services, whether related to pay, harassment or maternity leave, as examples, it is this cultural deficit that allows them all to persist. Culture is also the most difficult area to seek to reform”. 

This has been an area of focus for a number of our clients who, have undergone, or are undergoing,  an organisational culture review across the business. Pinsent Masons’ D&I consultancy Brook Graham and the Equality Law team have been involved in that work and we can report it has proved to be very effective, giving rise to the sort of changes which are being called for. So, what does that work involve exactly? To find out I caught up with Brook Graham’s Kieron O’Reilly:

1 December 2023 
Kieron O’Reilly: “This is an approach that's relatively new for us because we're part of the Equality Law Team at Pinsent Masons. So, Brook Graham is the diversity and inclusion consultancy and the Equality Law Team are the lawyers. What we found is that where we bring those two things together, and we want to work to make change happen, that we needed a client to be operating from top down. So, in this example, what we're finding is that where people are working collectively - so from the board, right through all forms of leadership - where they have a driver to work together to make some of the changes they want to achieve for the good in their organisation, we're applying these two aspects to come up with a way that the organisation can achieve its aims across the organisation and it fits with all different parts of it from the board right down to, for example, in a recent case, a union. That convening power means that all of these parts of an organisation work together, and they work effectively on the same goal. What we're seeing is, within six months, some of the changes that a couple of organisations have already started this programme, have achieved things in a period that might have taken a year. So, it's that collective working together to achieve a goal that we're seeing as a bit of a breakthrough, really, in some of the aspects when it comes to achieving diversity and inclusion goals.”

Joe Glavina: “Can you tell me about the work you’ve recently done with a client on this.”

Kieron O’Reilly: “Yes, certainly. So, this is where we began with the board and we wanted to do a culture review and that's looking at the organisation from top down. That includes policy and process as well as people. So, we spent some time meeting with the organisation, getting to know it well, and then reported back to the board on what the organisation was from a cultural aspect, and how that fitted with its aim and its purpose and then from that, practical actions were selected. Each of those were then put into place at the different levels of the organisation. So, what was put in place to support unions, what was put in place to support employees across the organisation varied, but was tied to the same goal, same as the board. The board approved it and, as a result, we've now seen a bit of restructuring going on that's been positive for all. We've seen a lot of achievement towards the organisation's aims and its goals but, most importantly, we've seen the employee satisfaction survey has increased by nearly 32% and that's in a period of six months. Now that was specifically done because of this work, but it was a way of measuring the change. That's quite dramatic for doing a structural change, for doing an organisational development piece of work, at that level.”

Joe Glavina: “In that case where did HR fit in?”  

Kieron O’Reilly: “So, it was it was led by the chair of the board, it was led by the chief executive, and then the third person in the project team was the Head of HR because this is, essentially, about people and the systems and the process of the go round it support the people. So, HR had a very central function to understand what the cultural views were saying, to understand how that applied to the organisation and then to lead the policy changes they wanted to see to affect the outcomes they were trying to get. So, HR were one of the three central decision makers in this project.”

Joe Glavina: “Given the lack of an HR presence in most boardrooms, I can see how this tool can help with that. Anything else to add, Kieron?”

Kieron O’Reilly: “I think one of the greatest aspects of this work is that it connected the organisation in a way that may not have been done before, right from the board through to someone who's just started as an apprentice, because all of their voices came together, they all had a representative connection, and they're all working towards the same goal. So, it aligned people to work collectively and it's quite an impressive way of seeing people come together and understanding what they're trying to achieve through their own business or their organisation and I think that was quite powerful.”

If you would like to know more about Organisational Culture Reviews please do contact Kieron – his details are there on the screen for you – or you can contact your usual Pinsent Masons’ adviser. Meanwhile, if you would like to read the Committee’s ‘Sexism in the City’ report you can – we’ve included a link to it in the transcript of this programme for you.

LINKS
- Link to Parliamentary Committee’s report: ‘Sexism in the City’