The compensation of senior financial industry executives in the U.K. should be tied to the number of women in top management at their firm, a U.K. Treasury review recommends.
The Treasury department on Wednesday announced that one of the preliminary recommendations from a review, which is being headed up by Jayne-Anne Gadhia, chief executive of Virgin Money, is to make the remuneration packages of a firm’s executive team dependent on gender balance.
In addition, the review recommends that financial services firms should publicly report on their gender diversity; and, that they should appoint an executive responsible for gender, diversity, and inclusion. The preliminary recommendations were presented at a summit hosted by the Economic Secretary to the Treasury, Harriett Baldwin, with senior financial industry representatives on Wednesday. A final report is due next year before the government tables its budget.
“It should be a wake-up call to everyone in financial services that fewer women progress to senior levels than in any other industry in the U.K.,” said Gadhia, in a statement. “There are many views as to why that might be. Motherhood, remuneration, the ‘old boys’ network’ are all mentioned, but only scratch the surface of an issue that has been hidden for too long.”
“Businesses will increase productivity and improve results by encouraging more women into senior roles. But the approach needs to fit the individual organization and the women involved,” she added. “My report proposes addressing the issue in a way that the City will recognize. Make it public, measure it and report on it. What gets published gets done.”
“Financial services is at the centre of driving productivity in the U.K., but it’s also a sector where the problem of gender diversity is particularly marked – especially in senior management. That is why Jayne-Anne Gadhia’s review is so important, and it is a key strand of the work towards achieving gender parity,” said Baldwin.