City bonuses should be linked to gender targets, review recommends
Bonuses for City executives should be tied to whether firms are meeting targets to increase the number of women in senior jobs, a Government-commissioned review has recommended.
The report by Virgin Money chief executive Jayne-Anne Gadhia called for financial services firms to sign up to a voluntary charter committing them to increase diversity.
The review found that in 2015, women made up only 14% of executive committees in the financial services sector and Ms Gadhia said it was a sign the "culture isn't right" in City firms.
Virgin Money will be one of the first firms to sign up to the new charter, with Lloyds Banking Group, Barclays, HSBC and the Royal Bank of Scotland also pledging their commitment to improve gender diversity.
Asset management firm Columbia Threadneedle and mutual Capital Credit Union will also sign up to the charter, which commits firms to having a member of the senior executive team responsible for gender diversity, to requiring internal targets for gender diversity in senior management, to publishing annual progress updates and linking executive pay to making progress.
Ms Gadhia said: "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."
Treasury Economic Secretary Harriett Baldwin said: "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."
