Leading financial services firms in the UK are expected to sign up to a Women in Finance Charter launched on Tuesday, which is based on the recommendations from a review carried out by Jayne-Anne Gadhia, chief executive of financial services firm Virgin Money.
The UK government revealed that with the launch of the new Charter, City bonuses will be linked to the appointment of senior women, following the publication of Gadhia’s review titled Empowering Productivity: harnessing the talents of women in financial services.
Gadhia’s recommendations will be implemented to improve gender diversity in senior positions in the financial services sector and call for financial service firms to connect parts of the remuneration packages of their executive teams to gender balance targets. The review also recommends that firms set internal targets for gender diversity in their senior management, publish progress reports annually against these targets and appoint an executive solely responsible for gender, diversity and inclusion.
According to the government, the new Women in Finance Charter will result in changes to the senior levels of the male-dominated financial services industry.
Representatives of four of the UK financial sector’s largest employers, Lloyds Banking Group, Barclays, HSBC and the Royal Bank of Scotland, will pledge their commitment to improve gender diversity in their firms, joining Gadhia who will be the first bank chief to sign the Charter on behalf of Virgin Money.
In addition, Columbia Threadneedle will be the first Asset Management firm to sign the Charter, while Capital Credit Union will be the first mutual to sign up.
A list of financial service firms that sign up to the Charter will be published by HM Treasury after three months.
Economic Secretary to the Treasury, Harriett Baldwin, commented: “Achieving gender balance at all levels across financial services firms is a personal priority of mine which is why I asked Jayne-Anne to carry out this incredibly important review into women in finance in the Productivity Plan.
“I am delighted to accept her recommendations in full. It is fantastic that a number of leading banks have already committed to sign up to our new Women in Finance Charter and I encourage all firms across the sector to follow suit. Removing the barriers which prevent women from fully realising their potential in the labour market is a crucial part of improving the UK’s long-term economic performance.
“Financial services can lead the way as the sector with the highest pay in the UK and the widest gender pay gap. The widespread adoption of the review’s recommendations will help make a genuine difference to gender diversity in financial services. This is just one part of the government’s broader ambition to tackle gender inequality in the workplace.”
Commenting on her review, Gadhia said: “The objective of the review was to understand what more could be done to get more women into senior leadership positions. To achieve this, we had an open, transparent and democratic debate, and involved as many firms and individuals as possible to hear all the relevant voices and win broad and widespread support.
“Our research showed that in 2015, women made up only 14% of Executive Committees in the financial services sector. Too few women get to the top and this is not just about childcare. Women are leaving because the culture isn’t right. It’s very encouraging that a number of major financial services companies have already agreed to implement our recommendations. As a result, the issue will now be addressed in a way the City recognises. Make it public, measure it and report on it. What gets published gets done.
“The social and economic benefits are clear and I look forward to more financial services companies signing up to the Charter in due course.”