Members of Parliament are urging the implementation of new legislation to prohibit City firms from employing non-disclosure agreements (NDAs) to silence victims, following a parliamentary inquiry that uncovered a “shocking” prevalence of sexual harassment and bullying against women within the UK’s financial sector.
One of the key recommendations arising from the Treasury Committee’s Sexism in the City inquiry calls for stringent measures to address this issue, expressing concerns about the lack of advancement in promoting and safeguarding women in one of the UK’s most lucrative industries.
During the eight-month inquiry, MPs heard testimony from City executives, financial regulators, ministers, and women working across the sector. They were alarmed by the extent of sexual harassment and bullying, including serious sexual assault and rape, which persists within financial services, as well as the inadequate handling of allegations by firms.
The committee criticised the widespread misuse of NDAs, noting that they often serve to silence victims of harassment, compelling them to leave their organisations, while shielding perpetrators and enabling them to continue their careers unchecked.
Urging the government to take action, the influential cross-party committee called for the prohibition of NDAs in harassment cases and the reinforcement of protections for whistleblowers.
Moreover, the committee stressed the necessity for firms to adopt a “zero tolerance approach” towards misconduct across the financial and professional services industry, which employs around 2.5 million people and contributes approximately £278 billion, or 12% of the country’s economic output.
Harriett Baldwin, Chair of the Treasury Committee, remarked, “Efforts to tackle sexism in the City must progress at a much faster pace if this well-paid sector wishes to maintain its competitive advantage by drawing upon the broadest talent pool possible.”
The committee emphasised the need for men to play a more active role in challenging and reporting inappropriate behaviour by their male counterparts within their firms.
Additionally, concerns were raised about the lack of progress in achieving equal pay and increasing female representation in senior leadership roles across the City. Notably, the gender pay gap remains the highest among all UK sectors.
Despite the government’s gender pay gap reporting and the Women in Finance charter initiatives, which aim to enhance female representation in top positions, the committee found that these measures have not yielded the desired outcomes.
The report called for stronger measures to link executive pay with diversity improvements, the prohibition of salary history inquiries, and mandatory pay band disclosure in job adverts. It also urged the extension of gender pay gap reporting requirements to smaller firms and the review of the bonus cap removal to assess its impact on gender pay disparities.
The Financial Conduct Authority (FCA) stated its intention to review the range of views received, while the Treasury was approached for comment on the matter.