Quarter of financial firms ‘not taking sexism seriously’ as they fail to respond to regulator | Bolt Burdon Kemp Quarter of financial firms ‘not taking sexism seriously’ as they fail to respond to regulator | Bolt Burdon Kemp

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Quarter of financial firms ‘not taking sexism seriously’ as they fail to respond to regulator

Scores of financial firms have shown a blatant disregard for ending sexism and misogyny after more than a quarter of them failed to help an investigation into harassment and abuse in the sector.

The Financial Conduct Authority had legally instructed more than 1,000 firms to provide details of the number of sexual misconduct incidents and other data as it reviewed how companies handle issues of non-financial misconduct.

But according to a Freedom of Information request by financial newsroom Bloomberg, more than 250 regulated firms have missed the response deadline, and 36 requested an extension to provide the information.

The review was launched after the Treasury Committee concluded its inquiry into sexism in the financial services sector in January 2024. The inquiry, Sexism in the City, heard from industry regulators such as the FCA and the Prudential Regulation Authority (PRA) about the pervasive issue of sexual misconduct within the industry.

During the session, the committee expressed disappointment in the lack of progress made in addressing sexism and misogyny in the workplace, noting whilst overt sexism has decreased, harmful mindsets persist, and misogynistic behaviour has instead become more underhand.

Many attendees reported little or no action had been taken against perpetrators of sexual misconduct, allowing them to advance in their careers without consequence. The committee noted that this is a stark contrast to the attitude taken towards allegations of financial misconduct, which is strictly punishable under the FCA’s Code of Conduct.

To read more about the findings from the final evidence hearing, you can read my blog here.

Following this revealing session, the FCA initiated its review, requesting information from just over 1,000 firms regarding their reporting mechanisms, use of non-disclosure agreements (NDAs), and the number reported incidents of sexual misconduct.

Concerningly, it seems many firms disregarded the legal notice included in the watchdog’s survey request, which warned of potential penalties for a lack of adequate response. These penalties included financial sanctions, as well as searches of the company’s premise.

The disappointing response rate is indicative of a systemic issue within the industry in which sexism and misogyny is not taken seriously. The industry’s lack of response to the watchdog’s review highlights the need for stricter regulatory measures to ensure firms are held accountable for both addressing and preventing bullying and sexual misconduct in the workplace.

The FCA and PRA have been consulting on proposals to introduce a new regulatory framework on diversity and inclusion in the financial sector, focusing heavily on the issue of non-financial misconduct.

The regulators have proposed amendments to the current FCA Code of Conduct, which will explicitly address issues such as bullying and sexual harassment. The FCA is expected to publish the updated policy statement in mid-2024, and it is hoped this will encourage the remaining reluctant firms to engage in addressing the issues of sexism and misogyny.

To ensure women’s safety in the workplace, it is essential firms work towards creating respectful working environments in which such behaviour is appropriately addressed. The inclusion on non-financial misconduct in the Code of Conduct is a welcomed and essential change.

Harassment of any form should not be tolerated. If you have been the victim of sexual harassment, or bullying, we encourage you to reach out to Bolt Burdon Kemp for a free and confidential conversation with one of our experts.

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