The FCA has said that the senior managers regime include allegations of sexual misconduct, but are regulators doing everything they can to improve the lot for women in business.
It was a scandal which was as shocking as it was unsurprising. When journalist Maddison Marriage exposed a catalogue of misbehaviour at the now-infamous Presidents Club party, she lifted the lid on a toxic culture, which most of us assumed already existed.
Sexual harassment and SMCR
The FCA’s Megan Butler has confirmed that the new Senior Managers Regime will include allegations of sexual misconduct among the factors that determine whether or not someone is deemed fit and proper to work in the financial services, but this only hits the tip of the iceberg.
At every point in the business world – whether it’s accessing the top jobs, getting equal pay or even raising investment for business ideas, women face an uphill battle.
Research published last year found that only 2% of venture capital went to female run enterprises, despite evidence suggesting female entrepreneurs do more with the money that they do receive. New Government rules requiring businesses with more than 250 members of staff to report on pay levels have been criticised as being toothless.
Although proceedings against a company if it misses the deadline for disclosing information begin immediately the process is slow and cumbersome will little certainty that those who contravene the rules will ever be penalised.
The FCA’s rules on gender pay disclosure have highlighted pay inequality with more than 70% of companies who disclosed that information showing that men on average are paid more than women. However, this does not conclusively demonstrate that pay is different for the same positions – something which would be a clear contravention of the Equal Pay Act. Ryan Air, for example, argued that its pay discrepancy was due to the vast majority of its pilots being men.
This points at a key issue and it’s one which is much harder to regulate – culture. The financial sector acts and thinks like a man because despite some progress the majority of top positions are controlled by men. They control the flow of capital and decide on business decisions which places women at a disadvantage at every point.
People are more inclined to recruit people who share a similar outlook, so while men are in charge of the hiring process they are more likely to choose other men.
Male venture capitalists are also more likely to support male enterprises even though data suggests they might not be as successful because they run businesses they can understand and conform to their idea of what constitutes a good leader.
Turning this ship around is difficult. From a regulator’s point of view it relates to the FCAs attempts to address governance and culture. Its statements on sexual harassment and the Senior Managers Regime should undoubtedly be welcomed as something which can improve conditions for women in the workplace and spark a change in corporate attitudes.
The FCA’s approach has always to use its focus on culture and governance to create a positive environment within financial services, one which avoids non-compliance. When it comes to promoting a fairer deal for women this could prove to be crucial.