One year on from the publication of the U.K. Treasury Committee's Women in Finance report, the financial services industry has taken some positive steps toward improving gender equality, but a senior Bank of England executive has warned that pockets of "truly toxic" culture remain.
The report, which the influential committee published in June 2018, addressed aspects of working life in financial services that can put women at a disadvantage, including bonus culture, presenteeism and inadequate provisions for working parents.
Since its publication, large firms in the U.K. have revealed gender pay gap data for the second consecutive year, allowing for a year-over-year comparison showing that some large banks have made progress while others have not.
Senior figures from U.K. financial institutions including Aviva PLC's interm CEO of U.K. insurance, Angela Darlington, HSBC Holdings PLC's group chief human resources officer, Elaine Arden, and two senior Bank of England executives gathered at the House of Commons on June 12 to give evidence on the state of gender equality in U.K. financial services.
The BoE's executive director of supervision - investment, wholesale and specialist, Megan Butler, said the Women in Finance report has been "hugely important" in raising engagement in gender issues in financial services.
"We've seen a direct uptick in whisteblows [for gender-related incidents] after this report," she told the hearing. "Yes, there has been progress."
However, she said "pockets of truly toxic culture" still exist in financial services, adding that large financial institutions tend to have done a better job in terms of gender equality than many of their smaller rivals.
"There is a huge tail of [smaller] financial services firms that don't get the pressure or the media attention when it comes to gender equality," Butler said.
Witnesses said the bonus culture was undergoing substantial changes and becoming more women-friendly at their organisations.
The Women in Finance report argued last year that large banks' and insurers' bonus culture was skewed in the interests of men because it rewarded those who could argue the most forcefully about how well they have performed.
Financial institutions are increasingly using a "scorecard" approach that awards bonuses based on a range of metrics including values and ethics, and the performance of the team as a whole, as well as individual achievement, according to HSBC's Arden and Yorkshire Building Society's director of people performance, Tracey Newton, both speaking during the hearing.
But the financial services industry still needs to think long and hard about how responds to behavior, and ensure that it incentivizes behavior as well as penalizing bad behavior, Butler said.
Witnesses said there is an increasing understanding in financial institutions that parenting is not just a woman's concern.
"The younger generation are more minded to have an equal home life," Aviva's Angela Darlington said.
Arden agreed that looking after a family is increasingly seen as a "joint job" which means that it banks should offer flexible working options and parental leave to men as well as women.
The Bank of England's Butler said that it was important that senior staff of all genders be seen to take advantage of the opportunities to work flexibly and to take unpaid leave in order to demonstrate to more junior colleagues that this is acceptable behavior.
Banks in particular must also face up to the issue of attracting female talent in the first place, according to Kate Grussing, founder and managing director of Sapphire Partners, an executive search firm. Banking as a career no longer holds the prestige it used to, plus perceptions of a macho, long-hours culture can be off-putting to women, she said.
"The bloom is off the rose for financial services. We need to demonstrate that this is still an attractive sector for women to work in. We need to show that the presenteeism culture is changing," she said.
The Women in Finance report suggested that there there was a link between presenteeism and bonus culture, with women who work flexibly or from home potentially missing out on financial rewards due to being less "visible" in the workplace.
Banks in the U.K. are expected to face a parliamentary hearing this summer over the gender pay gap, Conservative Member of Parliament and Treasury Select Committee Chair Nicky Morgan told reporters in May.