Reports of bullying, discrimination surge in British financial services
LONDON, Oct 25 (Reuters) -Reports of bullying, discrimination and other non-financial misconduct in Britain's finance industry surged almost 60% over three years to 2023 - and more than one third of firms did not report such cases to their boards, a regulatory survey showed.
In the first comprehensive study of how banks, insurers and brokerages detect and handle such misconduct, the Financial Conduct Authority (FCA) noted on Friday that the number of reports, which rose to 2,347 in 2023 from 1,363 in 2021, could also point to a healthy "speak up" culture.
But almost 40% of London's market insurers and intermediaries employing at least 250 staff said they had no formal governance structure or committee to consider non-financial misconduct cases and 44% of insurers said boards, or board level committees, did not receive information about such cases at all.
The FCA, which in February ordered more than 1,000 financial firms to answer comprehensive questions about incidents ranging from whistleblowing to violence, intimidation or the possession or use of illegal drugs in 2021, 2022 and 2023, now wants the industry to use the data to ensure best practice.
"The results should act as a catalyst for regulated firms' boards and trade associations to prioritise and act on issues of non-financial misconduct that lead to poor working cultures and can ultimately harm consumers or market integrity," it said.
The view that London's financial sector remains an "old boys club" in which perpetrators of abuse operate with apparent impunity became more widespread after sexual assault and misconduct allegations against hedge fund founder Crispin Odey and Confederation of British Industry (CBI) officials last year.
Odey has denied wrongdoing. The CBI said it had dismissed a small number of staff who failed to meet "high standards of conduct".
The survey found that those who committed non-financial misconduct were rarely hit in their pocket. When remuneration was adjusted, it was mostly against unvested variable pay.
Finance staff with incidents of non-financial misconduct on their regulator-mandated employment reference were still being hired last year, but their number dropped to five from 10 in 2021, the survey showed.
The number of confidentiality agreements signed by complainants, meanwhile, fell from 87 to 51 last year.
Meg Hillier, who chairs the influential parliamentary Treasury Committee, said lawmakers would seek further clarity about the data when they next quiz the FCA.
"During the last parliament, previous members of the Treasury Committee found a shocking prevalence of sexual harassment and bullying in the finance sector, and a culture which is holding back women," she said.
"On the surface, these latest findings seem to show that far from the City (of London) dealing with these issues, it may even be going backwards."
Reporting by Kirstin Ridley, Editing by Rosalba O'Brien
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