Sexual harassment claims in financial services more than triple in past year

Financial Reporter asked industry experts for their views on the figures.

Related topics:  Finance News
Rozi Jones | Editor, Barcadia Media Limited
9th May 2023
Women business finance
"It’s not that things are getting worse, it is more an indicator of a cultural shift that enables individuals to feel confident in calling it out"

The number of whistle-blower reports made to the FCA regarding sexual harassment more than tripled in the past year from three in 2020-21 to 10 in 2021-22, according to analysis from employment and partnership law specialists, Fox & Partners.

The increase comes as employees are spending more time in the office following the end of social distancing and socialising with colleagues outside of working hours.

Fox & Partners says the fact that sexual harassment reports are beginning to rise again highlights the importance for financial services firms of having appropriate systems and controls in place. Not only will these help to minimise the risk of sexual harassment occurring in the first place but will also ensure any complaints are dealt with promptly, properly, and thoroughly.

The FCA has taken an increasingly hard-line approach to sexual harassment, including using the Senior Managers and Certification Regime (SMCR) to hold individuals to account. Behaviour such as sexual harassment is considered when assessing whether managers are deemed ‘fit and proper’ to do their jobs. Serious breaches of conduct may result in fines or even a ban from working in financial services. This approach from the regulator may also encourage employees to feel confident in speaking up where they are subject to or witness inappropriate conduct.

Catriona Watt from Fox & Partners says it is important that senior management within financial services firms make it clear that sexual harassment will not be tolerated and that this message comes from the top.

She said: “Sexual harassment reports are beginning to edge up as financial services employees spend more time in the office.

“The CBI scandal shows just how damaging allegations in this area can be to an organisation and how a poor workplace culture where misconduct can thrive can lead to severe problems.

“When it comes to tackling the issue of sexual harassment, it’s vital that companies have in place proper systems and processes to identify and properly investigate harassment claims. Effective procedural safeguards that protect accusers, clear guidance on dealing with alleged perpetrators fairly, and reporting properly to stakeholders at all stages of the process are essential.”

Financial Reporter asked industry experts for their views on the figures.

Robert Sinclair, chief executive of the AMI said: “Whilst these are very low numbers, it is unacceptable for any person to suffer sexual harassment in the workplace or anywhere else. The work AMI has been doing is to create clarity that firms in the mortgage sector will not tolerate this and we are acting to promote best practice that gives safe routes for people to report unacceptable actions.

"As has been seen recently even large organisations can find it difficult to correctly handle allegations and this is why AMI and IMLA have been partnering to facilitate the calling out of poor behaviour or weak management action.”

Andrew Montlake, managing director at Coreco, said: "It is terrible that issues such as this still occur and as an industry, we will not rest until they are consigned to history. The positive to take from this however is that there has been a fundamental shift since the AMI Viewpoint report into D&I, and coupled with the support of IMLA and the excellent work of groups such as DIFF, more people now feel able to report such issues rather than suffer in silence.

"With this in mind, it is important to show that this is not that it is getting worse, but that it is getting better. Perpetrators know that they can no longer get away with this behavior and those that come forward will be supported. The Working in Mortgages website is a great resource and there are now places and people to turn to who will listen."

Scott Taylor-Barr, financial adviser at Carl Summers Financial Services, commented: "Whilst I have no evidence one way or the other, it is my deepest hope that this increase is due to the work the likes of AMI and IMLA are doing to make financial services a more inclusive, diverse and safe place to work giving those that are being harassed the courage to stand up, knowing that they will be supported. The impact that projects such as Working In Mortgages has had within the sector can already be seen and hopefully more and more of these initiatives will further help to make the whole of financial services a safe, diverse and inclusive place for people to work and be their genuine selves in the workplace."

Debbie Porter, managing director at Destination Digital Marketing, said: "Just as the recent news of the sexual misconduct of multiple senior figures at the CBI broke outlining years of misconduct, a rise in whistleblowing in any industry isn’t an indicator of anything other than more people have chosen to step forwards.

"It’s not that things are getting worse, it is more an indicator of a cultural shift that enables individuals to feel confident in calling it out and not feeling ashamed for doing so. Organisations that support whistleblowers rather than persecute them by swiftly managing them out of the business will also be a reason we are hearing of more incidents. Compromise agreements brokered by HR departments don’t get included in these figures, and if we had true transparency, they would."

David Robinson, co-founder at Wildcat Law, said: "Sadly this is a problem that never went away but I suspect the figures finally represent more people speaking out about it. I am constantly amazed that financial services still has a number of firms where this is allowed to continue. Unfortunately it is usually due to the male dominance of many roles within financial services which allows an archaic "boys" environment. As this often goes very high up within the organisations it is no wonder that it has not been effectively stamped out. It is not enough to have more women in senior positions we need significant cultural changes within organisations as well."

Emma Jones, managing director at Whenthebanksaysno.co.uk, added: "I can imagine there’s still issues because mindset needs to change and that’s not an overnight fix. I am glad to see reports are being made and maybe this is just a sign that more people are reporting it now to help stamp it out.

"My question I am asking myself is how many of those reports were took seriously with the right consequences?"

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