Lessons from the UK’s financial sector sexual harassment and misconduct enquiry
Five key takeaways for organisations
By Helena Wacko, Equity, Diversity & Inclusion Researcher
The UK financial sector has been under close examination since the Treasury Committee’s Sexism in the City inquiry was launched last year. This investigation revealed a shocking prevalence of sexual harassment, widespread cover-ups, including frequent use of non-disclosure agreements in sexual misconduct cases, and weak protections for whistleblowers.
Sexual harassment1 is not exclusive to the financial sector and presents a significant barrier to women in numerous other industries. In fact, one in two women in the UK have experienced some form of sexual harassment in the workplace.2 Sexual harassment denies equal access to a safe working environment. Research from MIT has found that women in leadership positions are not immune to sexual harassment — a pattern that holds across different regions — as they often face harassment as backlash for defying rigid and sexist gender role expectations.3 Moreover, it is an intersectional issue that can interlock with other forms of harassment, such as racism or homophobia, compounding the experience. The Trades Union Congress (TUC) has documented especially high levels of sexual harassment and assault among marginalised groups, with seven in ten LGBT+ workers and disabled women in the UK experiencing at least one type of sexual harassment at work.4
Women and marginalised groups who experience sexual harassment often do not feel safe speaking up, as their workplace experiences are typically already marked by prejudice and hostility. They may fear retaliation, especially in environments like the financial sector where sexual harassment remains taboo. This was confirmed by the Sexism in the City report findings that women who reported harassment typically faced negative outcomes, with the majority being forced to change roles or leave the company.5 This trend is not exclusive to the financial sector. In fact, according to TUC a staggering four out of five people do not report incidents of sexual harassment to their employer, often due to a genuine fear of retaliation and further victimisation.6
The financial sector has long faced criticism over its inclusion of women and the quality of workplace wellbeing. In 2023, this scrutiny came to a head with a series of high-profile sexual misconduct cases emerging at both Odey Asset Management and Confederation of British Industry — hailed by some as the industry’s own #MeToo moment. But what makes the structures and culture of the financial sector so prone to sexual misconduct? Aforementioned research from MIT suggests these professions are linked to a higher prevalence of toxic culture of negative masculinity.7 More specifically, the Sexism in the City inquiry suggest that diversity and inclusion efforts are treated as mere “tick-box” exercises in the UK financial sector.8 The sector continues to grapple with a widespread prevalence of sexual harassment and still holds the largest gender pay gap in the UK, all while being one of the highest-paid sectors in the country. This disparity perpetuates power imbalances, sexism, and bullying — ultimately reinforcing the sector’s traditional “alpha male” culture. This culture does not only punish women and marginalised groups, but also male allyship, by encouraging male colleagues to turn a blind eye to misconduct.
Workplace sexual misconduct is not only bound to the office. According to the committees’ report much of the sector’s sexual harassment has become “underhand and pernicious” and what was once overt sexism and misogyny now takes place in the “shadows” — at conferences or work trips, or over online platforms.9 In turn, making it harder to detect.
Why the UK FCA’s response is so significant
In response to the Sexism in the City inquiry, the United Kingdom Financial Conduct Authority (FCA) outlined stronger actions against non-financial misconduct along with increased efforts to collect data on sexual misconduct. This instance marked “the first time that the Financial Conduct Authority has tried to get an industry-wide sense of the level of non-financial misconduct in the industry.”10And in March 2024, firms across the financial sector began receiving information requests as part of the FCA’s efforts to map the reporting mechanisms and scope of sexual harassment, bullying, and prejudice.11
Recommendations for organisations
Having brought the deep-rooted issue of sexual harassment into light, what steps can the finance sector now take to align with the FCA’s actions on sexual harassment and the Treasury Committee’s recommendations? And how might these guidelines apply to other industries that face similar issues?
We have identified the key and most transferable recommendations from the Sexism in the City report,12 which are as follows:
- Adopt a zero-tolerance policy, end the impunity of repeat offenders, and ensure thorough investigations and appropriate consequences for harassment claims. Ensure this policy covers not only office-based conduct but also out-of-office activity, travel periods and online communications.
- Appoint senior leadership to oversee the implementation of new processes, potentially through independent channels, to prevent conflicts of interest.
- Address subtle forms of abusive behaviour and microaggressions – this is crucial and requires implementing training.
- Identify and rectify any misuse of non-disclosure agreements (NDAs) to silence victims while protecting perpetrators.
- Develop a culture where everyone, regardless of gender, actively challenge and feels free to report any incidents of harassment.13
These recommendations are valuable for all industries, underscoring the need for comprehensive and proactive measures to create safe and inclusive workplaces for all.
Shape Talent are gender equity specialists, providing strategy consulting, women’s development programmes and a suite of resources to help your organisation accelerate gender equity. If you’d like to discuss how we might support your organisation’s gender equity strategy, do get in touch.
Helena Wacko is an Equity, Diversity & Inclusion Researcher at Shape Talent, the equity, diversity and inclusion experts for complex multinational organisations who are serious about gender equality – and what it can achieve for their business.
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References
1 Sexual harassment can be defined as any kind of unwanted verbal, non-verbal, or physical conduct of a sexual nature.
2 https://www.tuc.org.uk/sexualharassmentworkinggroup
3 https://doi-org.gate3.library.lse.ac.uk/10.1162/daed_a_01781
4 https://www.tuc.org.uk/sexualharassmentworkinggroup
https://committees.parliament.uk/publications/43731/documents/217019/default/
6 https://www.tuc.org.uk/sexualharassmentworkinggroup
7 https://doi-org.gate3.library.lse.ac.uk/10.1162/daed_a_01781
8 https://committees.parliament.uk/publications/43731/documents/217019/default/
9 https://committees.parliament.uk/publications/43731/documents/217019/default/
10 https://www.ft.com/content/51a1e0d0-de3c-48ed-8053-501bab56e480
11 https://committees.parliament.uk/publications/43731/documents/217019/default/
12 https://committees.parliament.uk/publications/43731/documents/217019/default/
13 https://committees.parliament.uk/publications/43731/documents/217019/default/