HomeEmployee ExperienceDEI&BDiversity & InclusionUK’s FCA investigation into sexism within financial services questions the efficacy of HR policies

UK's FCA investigation into sexism within financial services questions the efficacy of HR policies

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UK Financial Regulator investigates sexism in investment banks and insurers, highlighting the crucial role of HR in combatting workplace misconduct.

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Sexism within the financial services sector has been a long-standing issue, with recent reports highlighting the extent of the problem.

The UK’s financial services regulator, the Financial Conduct Authority (FCA), has committed to investigating how investment banks and commercial insurers handle sexual harassment, bullying, and other non-financial misconduct. This move comes amid complaints from alleged victims who often feel silenced or forced to quit their jobs.

According to Reuters, Sarah Pritchard, an executive director at the Financial Conduct Authority (FCA), told British lawmakers on January 17, 2024 that it would survey the wholesale banking and insurance market to examine the prevalence of such misconduct and how it was detected and resolved.

“We can use what it tells us to take stock, to share best practice … but also, crucially, to inform our supervisory programme when the new rule sets come into place,” she told Parliament’s cross-party Treasury Committee.

The FCA’s review aims to assess the extent of misconduct and how much of it is being detected and resolved. The findings will inform the supervisory programme when new rule sets come into place.

However, the FCA’s managing director, Nikhil Rathi, has highlighted the lack of a prescribed list of non-financial offences that would automatically disqualify an individual from working in the sector, making it difficult to ban even convicted offenders from the industry.

The evidence session comes against the backdrop of sexual assault and misconduct allegations against hedge fund founder Crispin Odey and officials at The Confederation of British Industry (CBI), which pitched Odey’s hedge fund and the trade body into crisis. Odey has denied wrongdoing.
Forty women from 30 financial services companies, from boutiques to listed firms that spanned banking, insurance and asset management, met with the committee to share their personal experiences of sexism and misogyny anonymously last November.

The issue of sexism is not confined to the financial sector. A recent investigation into the RAF’s Red Arrows aerobatic team found a culture of sexism, harassment, and bullying. The report highlighted a bystander culture where inappropriate behaviour was rarely confronted, and women felt pressured to manage the situation rather than raising a formal complaint.

Stepping into action

These revelations underscore the critical role of HR in tackling sexism and creating a safe and inclusive work environment. HR professionals must ensure that there are robust policies in place to prevent such behaviour and that these policies are consistently enforced, regardless of an individual’s status within the organisation.

Firstly, HR should foster a culture of zero tolerance towards sexism and harassment. This involves clear communication about what constitutes inappropriate behaviour and the consequences for those who engage in such conduct. Training programmes can help employees understand the impact of their actions and how to intervene when they witness inappropriate behaviour.

Secondly, HR should provide multiple, confidential reporting channels for employees to report incidents of harassment or bullying. This includes anonymous reporting options to protect those who fear retaliation.

Thirdly, HR should ensure that all complaints are taken seriously and investigated promptly and thoroughly. This includes providing support to victims throughout the process and taking appropriate disciplinary action against perpetrators.

Lastly, HR should regularly review and update their policies and procedures to reflect evolving societal norms and legal requirements. This includes monitoring workplace culture and conducting regular employee surveys to identify areas for improvement.

The fight against sexism in the workplace requires a concerted effort from all stakeholders, with HR playing a pivotal role. By fostering a culture of respect and equality, HR can help create a work environment where everyone feels safe, valued, and able to contribute to their full potential.

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