Word on the web: Thawing the equality permafrost

A recently published report has recommended ways in which financial services firms can promote gender equality

‘Permafrost’ was the phrase used by Jayne-Anne Gadhia, CEO of Virgin Money, to describe how women are being held back from top financial positions, after her Government-sponsored review was published this week. 

The review aims to promote the appointment of women in senior roles and is part of a Government move to commit banks to a new voluntary Women in finance charter that sets out proposals to promote gender equality.

No magic bullet Ananya Roy, writing for International Business Times, sets out the cause, citing figures from the Organisation for Economic Co-operation and Development. It estimates that gender equality in the labour market could trigger a 10% rise in GDP by 2030. 

Roy highlights the key messages from the report, which she says do not recommend formal objectives or quotas. Instead, it proposes that firms introduce internal aims that would see “gender diversity in a company's top brass and pay packages linked to the company's gender balance”.

The potential rise in GDP by 2030 if labour market gender equality is achieved
The report also calls for firms to publicly post gender statistics and to hire an executive responsible for gender inclusion and diversity. 

But Roy notes Gadhia’s comment that they did not find a “magic bullet” and that different views, priorities and requirements would inform gender equality at different firms. 

Citing a Reuters article, Roy says that Lloyds Banking Group, Barclays HSBC and the Royal Bank of Scotland have committed to endorse the voluntary charter, along with Virgin Money, and that the UK Treasury will publish a list of all the firms that have signed up after three months.

International Business Times article

Following suitGraeme Whitfield digs a little deeper into the report in his article for Chronicle Live.

He starts with Gadhia’s finding that in 2015, women comprised just 14% of executive committees in the financial services sector, a figure that prompted Gadhia to conclude that “women are leaving [City of London firms] because the culture isn’t right”.

One of the chief recommendations from the report is to link bonuses for City executives to whether their firms are meeting targets to increase the number of women in senior jobs.
“Make it public, measure it and report on it. What gets published gets done”Whitfield quotes Gadhia: “It’s very encouraging that a number of major financial services companies have already agreed to implement our recommendations. The issue will now be addressed in a way the City recognises. Make it public, measure it and report on it. What gets published gets done.”

Whitfield goes on to quote Harriet Baldwin, Treasury Economic Secretary, who echoed Gadhia on the encouraging response to the report by several financial services firms: “It is fantastic that a number of leading banks have already committed to sign up to our new Women in finance charter and I encourage all firms across the sector to follow suit.

“Removing the barriers that prevent women from fully realising their potential in the labour market is a crucial part of improving the UK’s long-term economic performance.”

Chronicle Live report

Backward momentum The report has not been universally lauded, however, as Lauren Fedor reveals in her City AM article. Fedor points to criticism by Helena Morrissey, Founder of the 30% Club and CEO of Newton Investment Management, who has warned that tying bonuses to gender equality targets may “backfire”. 

“I’m worried it’s going to be confrontational,” Fedor quotes Morrissey, who adds that “many firms don’t want to alienate men or have women feeling men are going to resent [them].

“We have a great momentum in this whole direction. I just don’t want to go backwards on that.”

Fedor also shares the concerns of Seamus Neven, Head of Employment and Skills Policy at the Institute of Directors. Any linking of bonuses, he told City AM, must result in “meaningful change”. 

“We would not want to see managers promoting women just because their bonus depended on it.” 

City AM comment

Seen a blog, news story or discussion online that you think might interest CISI members? Email joanna.lewin@wardour.co.uk
Published: 24 Mar 2016
  • The Review
  • Work place
  • gender imbalance
  • Institute of Directors
  • Integrity at work in financial services
  • Word on the web

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