"My biggest disappointment lies in the regulators’ own response. Firms really want more guidance, and time has dragged on with nothing forthcoming."
- Baroness Morrissey
Financier, campaigner and Conservative peer, Baroness Helena Morrissey, has expressed concerns that sexism in the financial services industry "will never end".
A recent survey of over 1,000 firms by the FCA has found that the number of non-financial misconduct allegations reported has increased by 72% between 2021 and 2023. Allegations have increased from 1,363 in 2021 to 1,670 in 2022 and 2,347 in 2023.
In response, Baroness Morrissey said on LinkedIn that the report "confirms those few too often get away with it", adding that "we can expect other forms of poor behaviour - harassment, discrimination, bullying, racism and so on – to continue as well".
Morrissey founded the 30% Club, a campaign for more gender-balanced boards, and is Chair of the investment industry’s Diversity Project. She was CEO of Newton Investment Management for fifteen years and chaired the Investment Association from 2014 to 2017.
She noted that in over a third of sexual harassment incidents (where the complaint was upheld), no action was taken. Looking at all types of incidences, disciplinary or ‘other’ actions were taken in just 43% of cases. In the remainder the FCA saw ‘a range of other outcomes – either the cases were not investigated or unable to conclude, not upheld, upheld with no other action, or investigations were ongoing.’
In its report, the FCA noted that the rise in complaints could be "an indication of a healthy speak up culture", but I "have my doubts", Morrissey says.
She added that she found the numbers cited in the report around the use of NDAs or other settlement agreements "quite incredible" – just 7% of sexual harassment cases are said to involve a settlement agreement.
Morrissey said: "Time and again, the Diversity Project has received confidential reports through its Safe Space mechanism, where someone says their working life (and their life in general) has become worse after reporting what happened, while the perpetrator carries on, perhaps with a rap on the knuckles in the form of a verbal warning. I’m convinced many people don’t report at all, discouraged by the fate of colleagues before them.
"There is so much that firms can do to address these issues. Nearly 40% of large firms say they have no formal governance procedure for non-financial misconduct. Too often, these issues are left to stretched management teams without the relevant experience or expertise needed to sort these problems out, rather than escalated to boards who might insist on a proper resolution."
"But my biggest disappointment lies in the regulators’ own response", she said, adding that "firms really want more guidance, and time has dragged on with nothing forthcoming".
Sexism in the City
The Treasury's own 'Sexism in the City' report, published earlier this year, found "big pockets of no progress whatsoever" for women in finance, revealing only "incremental improvements" in the proportion of women holding senior roles in financial services firms.
The report also found "a disappointing lack of progress on sexual harassment and bullying, including serious sexual misconduct". The Treasury Committee said that following a previous report five years ago, it sought to find out how much had changed, stating that "disappointingly, the answer appears to be 'not much'", adding that "many of the barriers identified in 2018 remain stubbornly in place".
The Treasury Committee said it was "shocking to hear how prevalent sexual harassment and bullying, up to and including serious sexual assault and rape, still are in financial services, and how poorly firms handle allegations of such behaviours". It says it was particularly concerned to hear of the widespread misuse of non-disclosure agreements, which have the effect of silencing the victim of harassment and forcing them out of an organisation, while protecting perpetrators and leaving them free to continue their careers and go on to abuse others.
The report said: "As in 2018, the overarching problem behind all these issues is that of impunity for perpetrators and culture, and the limited progress since 2018 can largely be ascribed to a lack of cultural change in the sector."
