MPs have called on Britain’s banks and other financial firms to tackle their “alpha male culture”, in a parliamentary report that recommends measures to close the City’s gender pay gap including clearer criteria for awarding bonuses and senior male executives taking up flexible working.
The Treasury committee’s report follows its investigation into women in finance, and found the alpha male culture was the main reason women gave for not wanting to work in senior management at City firms.
This culture was particularly evident in bonus negotiations, in which men can receive bigger rewards by arguing more forcefully, the report said.
The report cited a “pyramid” model at financial firms, where the proportion of women to men dwindles at the upper levels of management.
It comes two months after the deadline for all UK companies with more than 250 employees to report their gender pay gap. This revealed banks are among companies with the biggest pay gaps in the UK, with Barclays’ investment banking arm reporting a 43.5% median gap in favour of men and a 73% gap for bonuses. The national average median pay gap is 18.4%.
The Women in Finance report found that the median bonus pay gap is 49% in favour of men at UK banks, and 38% at building societies. The bonus gap is 43.5% overall, meaning that for every £100,000 of bonuses handed out to men, women are only getting £56,500. The gender pay gap per hour in finance is 28%.
“The benefits of gender diversity are highlighted in the report, including better financial performance, reduced groupthink and more open discussions,” said Nicky Morgan, the Conservative MP and Treasury select committee chair.
“The next step must be for firms to set out how they will abolish their gender pay gap and support the progression of women. Firms should focus on changing the culture in financial services firms, which remains a deterrent for women, especially the bonus culture.”
The 51-page report – which includes insight from senior industry figures including Anne Richards, chief executive of fund manager M&G Investments, and Virgin Money chief Jayne-Anne Gadhia – also calls on senior men to tackle the stigma associated with flexible working, which is perceived as a “female” approach and can knock career progression.
Senior men are being urged to “lead by example” by working flexibly themselves, helping displace a culture of presenteeism where staff work unnecessarily long hours in the office.
Other recommendations include:
- Encouraging firms to publish strategies for closing gender pay gaps
- Partners and subsidiary companies should not be exempt from gender pay gap reporting
- Firms should re-examine recruitment and promotion policies to eliminate unconscious bias
Richards said: “If you do not have objective criteria, women tend to be paid disproportionately less than men. The more objective you make the criteria, the more balance you get into it. That is about societal conditioning.”
Gadhia, who led the Treasury review of women in finance in 2016, said she had seen “alpha-male-ness” in her colleagues’ behaviour and “a very male culture” in some organisations in which she had worked.
The committee said partners of law and accounting firms and company subsidiaries that have fewer than 250 employees should not be exempt from gender pay gap reporting.
It also said that regulators such as the Bank of England and Financial Conduct Authority, whose gender pay gaps show similar trends to the financial services sector, needed to act as a role model in appointing more women to senior roles.
