In the news: Spotlight on bad behaviour

Personal misconduct, including groping and unwanted attention, is still all too common in the global financial services sector, despite the rise of the #metoo movement and the efforts of regulators
by Bethan Rees

Two executives from Lloyd’s of London insurers Tokio Marine Kiln (TMK) have left the company amid allegations of sexual harassment, reports Gavin Finch for Bloomberg. TMK is the Lloyd’s of London underwriting arm of Tokio Marine Holdings Inc, Japan’s oldest insurance company. One executive is accused of groping colleagues at a work party and the other is accused of stalking a junior employee with unsolicited text messages and emails asking her out on dates.

The two resignations surfaced amid the fallout from a March 2019 Bloomberg Businessweek article regarding the “endemic sexual misconduct in the Lloyd’s of London insurance market”, Finch writes. The CEO of TMK, Charles Franks, called a town hall meeting following the publication of the article, and “condemned the widespread behaviour it revealed”. Then, some current and former employees made complaints about abuse at TMK to a senior lawyer at the firm, Ifeanyi Okoh. 

Okoh is said to have contacted Franks and other senior managers via email about the harassment – Bloomberg News has reportedly seen the email. It reads: “Sadly, this is part of a longstanding pattern in TMK, one further amplified by systemic intimidation, normalisation of harassment and inhibiting reporting.”

Once the employee accused of groping was reported to the HR department, he opted to resign and was given a payout of more than £200,000. He has denied culpability and has contended that the company was partially responsible for any drunken behaviour as it had given the employees free alcohol. Finch writes: “The incident apparently wasn’t an isolated one. Three other current and former TMK employees, who asked for anonymity because they feared speaking publicly would hurt their careers, said it was common at work social events to be grabbed or harassed by colleagues who were drunk.”

Okoh’s email was forwarded to the FCA, the Prudential Regulation Authority and the Metropolitan Police. 

Bloomberg article

A focus on personal misconductOver the past year, personal misbehaviour, bullying, sexual discrimination and sexual misconduct in financial services has been an “emerging theme” according to the FCA, as reported by Rachel Addison for FT Adviser

Nausicaa Delfas, executive director of international at the FCA, speaking at City & Financial Global’s Women in Finance Summit 2019 on 10 June, said, “This type of serious misbehaviour is toxic to a working environment and can lead to bad outcomes for customers, staff, stakeholders and the firm.” She said the FCA expects companies to adopt a healthy work culture where the best risk decisions are taken, and the best talent is kept. 

“The FCA has previously confirmed sexual harassment falls within its regulatory scope,” Addison writes. The regulatory body also has targets for more female equality in its workplace. By 2020, it aims to have 45% of its senior leadership team identifying as female and by 2025, 50%. Its latest figures show a 39% female representation as senior leaders. 

FT Adviser article

Income tax officers in trouble Meanwhile, in India, the bad behaviour continues. The Narendra Modi-led government has taken action against high-ranking tax officers who are facing charges of sexual harassment and extortion, among other things, according to Shweta Modgil for People Matters.

Approximately 12 senior officers, including chief commissioners, principal commissioners and commissioners of income tax, have been handed compulsory retirement as part of a major crackdown on bureaucrats and officials participating in alleged corrupt exercises. Modgil reports that, as per sources, “the finance ministry has invoked rule 56J of the ‘fundamental rules’ against the officers, citing ‘public interest’.” 

“The clean-up is a first step to send a message that unacceptable behaviour will not be tolerated. Sources add the axe is also likely to fall on more such officers who have been under observation because of dubious records. While the retired officers will be given pay and allowances, they will not be entitled to pension benefits,” Modgil writes.

People Matters article

Although the FCA is pushing for less toxic workplaces and more gender diversity, it remains to be seen if the regulator will have any effect on the deep-rooted misbehaviour in the workplace.  

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Published: 14 Jun 2019
  • News
  • The Review
  • misconduct
  • Lloyd's of London
  • Narendra Modi
  • sexual harassment
  • metoo
  • India
  • FCA

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