Top finance firms to be quizzed on sexism and bullying as City ‘still a boys’ club’

The City of London is still riddled with a ‘boys’ club’ mentality that silences victims of sexual misconduct, the Treasury Committee has heard.

Little or no action has been taken against perpetrators of sexual misconduct in London’s financial district, MPs were told.

And while the financial industry tries to show the public it is striving for more diversity following the #MeToo movement, misogynists are simply learning to be more underhand.

Government ministers and chiefs from UK regulators, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), were giving evidence to the Treasury Committee as part of its ongoing inquiry into Sexism in the City.

You can read my blog discussing the inquiry’s previous evidence hearings here.

The main objective of the latest session was to investigate whether enough is being done to tackle the issues of sexism and misogyny in the financial services sector.

The Committee highlighted the disappointing lack of progress since the publication of its 2018 report on ‘Women in Finance’. This observation was reinforced by the recently published summary of the inquiry’s latest engagement event, in which attendees stated that “there has been a reduction in levels of overt sexism and misogyny in the workplace, such as sexist office banter, but that misogynistic mindsets remain widespread, with behaviours having instead become more underhand and pernicious”.

Several attendees highlighted a stark contrast between the light touch taken against perpetrators of sexual misconduct and the approach taken towards allegations of financial misconduct, which would typically result in immediate suspension.

Notably, attendees claimed victims are frequently silenced, often through the use of non-disclosure agreements, and that a ‘boys’ club’ mentality still largely dominates within the sector.

In September 2023, the FCA, alongside the PRA, published consultation papers on diversity and inclusion in the financial sector, with an aim of gathering feedback for Policy Statements that will provide firms with a deeper understanding of what is expected from them from a regulatory standpoint.

The papers specifically addressed the issue of non-financial misconduct, acknowledging the psychological damage that it can have on victims, as well as implications for the wider firm. The regulatory body harshly noted that its prevalence significantly decreases the reputation of UK financial services, and decreases consumer confidence.

Since the last evidence session, these consultations have now closed, and the regulators are currently in the process of reviewing feedback and developing their final regulatory requirements to be included in updated Policy Statements, which are due to be published later this year.

New investigation

In addition to their upcoming Policy Statement, the FCA advised the Treasury Committee that it would be surveying various financial services firms in order to gain a better understanding of how they deal with issues of non-financial misconduct, such as bullying and sexual harassment.

The survey, due to be completed by mid-year, will examine the prevalence of misconduct, as well as the ‘methods of detection and methods of resolution’ that follow, with an aim of informing the new Policy Statement and subsequent guidance.

In former evidence sessions, the Committee expressed concerns over the lack of clear definition of non-financial misconduct, and suggested that the FCA was erring on the side of caution in its consultation paper.

It is now encouraging to see that the FCA is taking further steps to examine the effectiveness of its current regulatory guidance, and it is hopeful that the results of the survey will demonstrate the need for stricter rules surrounding misconduct and resulting disciplinary action.

It will be necessary to thoroughly examine the new guidelines set forth by the financial regulators later this year in order to determine whether adequate measures have been proposed.

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.