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Women in Finance Charter: Financial services and the long and winding road...

22 March, 2016Ouida Taaffe

The Treasury has proposed that the pay of senior executives at financial firms should be linked to the firm’s gender balance. This is one of the four recommendations of the “Women in Finance Charter” (PDF), which was released on 22 March, following a review that began last year. “It should be a wake-up call to everyone in financial services that fewer women progress to senior levels than in any other industry in the UK,” said Jayne-Anne Gadhia, chief executive of Virgin Money and chair of the review, when it was first announced.

Financial services firms are not required to sign up to the charter. Those that do are asked not only to link pay to diversity, but to release reports on the gender diversity, appoint an executive who is responsible for diversity and inclusion at the firm, and to set targets for gender diversity in senior management.

It is likely that opinion will be divided on this move. Some might argue that this is both over-done and an unnecessary interference in the management of private companies. Some will feel that it does not go far enough. The Treasury argues that that greater gender diversity is in the City’s own self-interest. “A balanced workforce is good for business – it is good for customers, for profitability and workplace culture, and is increasingly attractive for investors,” it said in its statement.

For those of a cynical bent, it might be a good time to point out that company cultures can change – and in the interests of all.

What remains to be seen is whether the firms will agree. For those of a cynical bent, it might be a good time to point out that company cultures can change – and in the interests of all. Take a little trip back in time to the early nineteen-seventies, when things were rather different, with a glance at some of the job advertisements in “Pink”, a magazine for young women

The 1970 equal pay act, which legislated what was then the entirely discombobulating notion of equal pay for equal work, came into force in 1975. Many would argue that it has still to bite. After all, despite additional teeth being added to the legislation in the subsequent forty years, the pay gap remains and the City is often accused of being a particular culprit. Overall, women in the UK have an average gross hourly pay around 14 per cent lower than that of men. To try to remedy that, the government recently announced that all UK companies with more than 250 employees will have to publicise the number of men and women within pay bands from April 2018, which could make for interesting reading.

Still, even if further measures are necessary, there are already reasons to be both pleased and optimistic about gender balance in workforce. The UK has come a long way over the past 40 years.

We no longer expect job advertisements to be aimed at one gender in particular. The law mandates that there be no gender bias (though there can be legal exceptions to this, based on so-called “Genuine Occupational Qualification” such as requiring that the attendant in a woman’s changing room be female). That it is why it is an eye-opener to see some of the advertisements in “Pink”.

One (for Barclays, though it could have been any business), shows a very pretty young lady seated behind a desk, smiling at a slightly older young man. The ad has the hook “One year later they were married”. It doesn’t say whether Cinderella goes on to become manager of her branch, but the implication is that the “girls”, to quote the ad, were not encouraged to have their eye on the corner office. (Though, eyeing up the customers was, one assumes, fine.) Just to underline the point that bagging a husband with the wherewithal to pay a mortgage should really be the height of any sensible girl’s ambition, the ad says that the “girls” were, there to “help”. Once you stop goggling at this advertisement, and at the others like it, other thoughts start to develop. For example, were pretty girls hired partly to attract customers and help recruit male staff? The latter point is one – obliquely – made by National Westminster in the same magazine. “Jill combines marriage with National Westminster” by being married to (no, not Jack) but ‘Paul’ – whom she met there...

To be fair to the banks, it seems that in the 1970s many young people themselves expected women to stop cluttering up the workplace once they had had a chance to find a husband. A December, 1973 article in  The Journal of the Institute of Bankers points out that there was deeply entrenched discrimination against women by both genders. The article cites a study of Women in top financial jobs by Susanne Griffin from 1973, which was based on interviews with people in financial services. 1973 was the year when women were first allowed to join the London Stock Exchange - after decades of lobbying. What took them so long? Griffin says that the answer is that younger men kept voting to exclude them...What got them in? The London Exchange had agreed to a merger with regional exchanges that had already had women members.