On 14 May 2024 the House of Commons Treasury Committee published responses from HM Treasury, the PRA and the FCA to the recommendations in its report following its "Sexism in the City" Inquiry.
Facts
The conclusions of the Treasury Committee's report of 8 March 2024 was that while some incremental progress had been made to tackle sexism in financial services since 2018 progress has been disappointingly slow. The report found there remained a "shocking" prevalence of sexual harassment and bullying and that a "cultural deficit" existed which allowed poor behaviours to persist. The Inquiry identified the overarching problem behind all the issues as being that of impunity for perpetrators and a lack of cultural change in the sector.
The particular points of interest in the responses include:
- Impact of bonus cap removal. The PRA and FCA agree with the Inquiry that it is important to monitor the impact of removing the bonus cap on gender pay and inequality. They have committed to work with the Government and the Equality and Human Rights Commission (EHRC) and they will formally review the policy at the earliest opportunity once sufficient evidence is available.
- Non-financial misconduct (NFM). The FCA is now prioritising its work on NFM, including sexual harassment and bullying. It is assessing the responses received to the NFM survey issued to wholesale firms in the insurance, insurance intermediary, banking and broking sectors. It welcomes an opportunity to share its findings with the committee in due course. The FCA may issue similar surveys to other industry sectors in the future.
- Diversity data reporting and target setting. The FCA agrees it would not want any data collection to simply be a "tickbox" exercise without an appropriate focus on outcomes. The Women in Finance charter outlined the additional data being collected by signatories including that ethnicity, sexual orientation and disability are the most commonly collected datapoints. More than a quarter of signatories are beginning to overlay multiple diversity strands in their approach to monitoring. The FCA have said they will consider this in formulating its policy response.
- Whistleblowing. The FCA is currently considering how it can improve its approach to whistleblowing. The Labour party have said they are particularly interested in protections for those blowing the whistle on sexual harassment.
What this means for employers
We understand the FCA and the PRA are carefully reviewing the responses received to their consultation papers on diversity and inclusion. For a reminder about these proposals please see our earlier articles here:
Non-financial misconduct – new proposed FCA and PRA guidance
D&I in the Financial Services sector: FCA & PRA consultation proposals aimed at moving the dial
It seems likely that the Regulators will take the recommendations of the committee's report into account as part of the final policy. There has been no update on when the final policy will be published, but we are expecting it in the latter part of this year.
Sexism in the City - Report Summary 8 March 2024
