‘Alpha male’ culture deters women in finance

Financial services companies need to abolish their 'alpha-male' culture, with reforms to bonus negotiations and the promotion of flexible working to encourage the progression of women to senior levels, a Treasury committee report has recommended

MPs said their inquiry into women in finance indicated culture is the overwhelming reason that women said they do not want to get involved at the senior levels of the financial services sector, which becomes a self-reinforcing barrier.

The report suggested the alpha-male culture in some organisations is evident in bonus negotiations, where it is perceived that men argue more forcefully for bonuses than women and recommends performance bonuses should be assessed against clearly objective and formulaic criteria.

There is also evidence that flexible working can be perceived as a ‘female’ approach to working, and can adversely affect career progression. While long working hours based in the office can be unnecessary, particularly with modern technology, a culture of ‘presenteeism’ persists. To remove any stigma associated with flexible working, more senior men should lead by example by working flexibly.

Now that a large gender pay gap has been confirmed in the financial services sector by firms reporting their data, firms should be required to publish their strategies for overcoming their gap and supporting the progression of women. The report called for details of partner remuneration and pay rates at group subsidiaries should be included in gender pay gap data and not excluded, as happens currently.

Firms should re-examine promotion policies and practices to ensure that unconscious bias is eliminated at every stage. This will avoid potential applicants being deterred and help avoid groupthink. The report also called for wider promotion of the shared parental leave scheme, which it said had a very low take up, as part of efforts to ensure women who go on maternity leave can reintegrate into the workforce at the same level of role as previously.

The report included a call to action for financial regulators and the Treasury, which it said should lead by example and continue to improve their representation of women at senior positions and reduce their gender pay gaps.

Finally, the report pointed out that gender diversity is only one aspect of the diversity agenda. Firms should widen their diversity initiatives and consider the representation of other forms of diversity within their organisations. The Treasury should extend its focus to other forms of diversity in finance, and should start by understanding its own treatment of employees from diverse backgrounds.

Nicky Morgan, chair of the Treasury committee, said: ‘The reporting of gender pay gaps at financial services firms confirms that a large gap exists between men and women working in finance, in part due to significantly more men than women in higher earning and more senior positions.

The benefits of gender diversity are highlighted in the report, including better financial performance, reduced groupthink and more open discussions.

The next step must be for firms to set out how they will abolish their gender pay gap and support the progression of women. Firms should focus on changing the culture in financial services firms, which remains a deterrent for women, especially the bonus culture.’

Women in Finance is here.

Report by Pat Sweet

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