Treasury committee pressures City firms over gender diversity
The UK’s Treasury Select Committee has sent letters to 33 financial services firms yet to sign up to the Women in Finance Charter. Around half of the UK financial sector are yet to commit to the initiative, while the UK banking industry in particular faces continued criticism for its failure to address its lack of gender diversity.
The Women in Finance Charter is a document which focuses on increasing diversity in the finance industry, committing signatories to four key pledges. These call for the financial sector to promote gender diversity by having one member of every firm’s senior executive team become responsible and accountable for gender diversity and inclusion, setting internal targets for gender diversity in the firm’s senior management, and publishing progress annually against these targets in reports on our website. Most importantly, the proposals include an intention to ensure the pay of the senior executive team is linked to delivery against these internal targets on gender diversity.
More than 160 companies with more than 600,000 employees in the financial services industry had signed up to the charter by November last year. These include numerous professional services firms, the Big Four of Deloitte, KPMG, PwC, EY, and regulatory institutions such as the Financial Reporting Council, the Financial Conduct Authority, the British Bankers’ Association and the Bank of England. However, this means roughly 50% of the industry's workforce is still not covered by the charter.
This represents a significant challenge to the credibility of the Government scheme, as City giants such as Goldman Sachs, JP Morgan, UBS and others have not signed up. The Treasury said it was "working hard" to get more firms to commit to the charter, which was first published in 2016. Treasury Select Committee Chair, former Minister for Women and Equalities Nicky Morgan, has subsequently written to 33 financial services firms who have yet to sign up.
Morgan has asked the companies to confirm to the committee by Friday if they plan to join the initiative, or explain why they have decided not to do so, saying in the letter, "The progress of the Women in Finance Charter is to be welcomed. The aim, however, must be to see all firms in the financial sector sign up to the charter and make a concerted effort to improve their gender diversity, particularly in senior roles.”
While multiple firms including Goldman Sachs, UBS, JP Morgan, NFU Mutual and Bupa have each responded, via comments to the British press, that they support the aims of the Women in Finance Charter in principle, they were taking steps to consider becoming signatories. While this might sound like progress, the businesses have dragged their feet on the matter for the past two years, neglecting the voluntary contract, in spite of its growing public prominence of the charter. The non-binding nature of the pledge may well be at the heart of such firms failing to take it seriously, sooner.
Late last year, new gender-pay-reporting legislation also came into force in the UK, requiring companies with more than 250 employees to annually release statutory calculations showing how large the pay gap is between their male and female employees. However, as this was legally binding action, most took initial steps to become compliant pre-emptively, with Big Four professional service firms Deloitte, EY and PwC among those to voluntarily release their data ahead of time.
