'More needs done' on financial services diversity: UK government

In its response to a report published in June by the House of Commons Treasury Committee, the government said the “moral and economic case for gender balance” was clear.

Employment law expert Jon Fisher of Pinsent Masons, the law firm behind Out-Law.com, said: “The response illustrates yet again how high-profile diversity issues are in the financial services sector, following the negative publicity attracted by the gender pay data and the increased regulatory scrutiny of the implications of diversity on culture.”

The government stopped short of committing to an expansion of the requirements for gender pay gap reporting, as recommended by the committee.

The government said the impact of introducing mandatory reporting on gender pay for all organisations with more than 250 employees had been significant, and that it was working to examine the data to help businesses identify strategies to close the pay gap between men and women.

“It is important to recognise that the regulations are still in their infancy, with organisations having only just completed the first year of reporting. The legislation itself is groundbreaking, with no other country asking for this level of transparency, although we will review it in five years. The government believes that this is an adequate timeframe after which we will be able to properly evaluate the regulations and their impact,” said the government, rejecting the committee’s calls to extend the requirements to smaller companies, and to include equity partner data.

“The response highlights the work the government is doing to gather evidence on the most effective strategies to improve gender diversity, and sets out the government’s expectations that financial services businesses will evaluate their own strategies in the light of their findings,” Fisher said.

The government said changing workplace culture was vital to improve the numbers of senior women in the financial services sector. It said the introduction of the Treasury’s ‘Women in Finance Charter’ in 2016 had made a difference to diversity, but more needed to be done, especially to address issues of unconscious bias.

The government responded also to the committee’s criticism of diversity within HM Treasury and financial regulators. It said it was committed to discuss gender diversity and the pay gap as frequently as other priorities, and was proactively working with the public and private sectors to ensure there was a diverse pipeline of candidates for appointments to the regulators.

“HM Treasury is encouraged by the extent to which the issues raised in the report have sparked a national debate and are being taken seriously by lots of firms within industry. Financial services contribute a great deal to the British economy and that is why it is so important the sector reflects wider society. Not only is achieving greater diversity the right thing to do it is also the smart thing to do because it will make the sector more competitive and productive, benefitting everyone,” said government ministers John Glen and Victoria Atkins.