Select committee: Treasury Committee
Conclusion 5
Sixth Report - Sexism in the City
Published 8 Mar 2024
Paragraph 45
Addressed to HM Treasury
Treasury Committee Sexism in the City All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
We heard that linking senior executive pay and bonuses to performance on diversity and inclusion can be an effective way to incentivise change, though this practice is not currently widespread. One of the Women in Finance Charter principles is for firms to have an ‘intent’ to link pay to delivery on gender diversity targets. Eight years on from the launch of the Charter, we think it is now time to sharpen this principle to increase its effect. We therefore recommend making the link to executive pay a firmer commitment under the Charter, on a ‘comply or explain’ basis.
From: Treasury Committee, Sixth Report - Sexism in the City (HC 240), paragraph 45, 8 March 2024
Government response
The government responded to the whole report on 14 May 2024 (deadline 8 May 2024).
Summary written by Accountability Index from the government's response. It is not the government's own words.HM Treasury, the PRA and the FCA each welcome the Committee's report, with HM Treasury agreeing with some recommendations but declining others, and the regulators saying they will consider the recommendations on data and targets as they finalise policy.
- On extending the Women in Finance Charter beyond senior representation, HM Treasury agrees a talent pipeline matters but is "unpersuaded" that expanding the Charter's scope is "the right way" to drive change, citing the burden on firms.
- On pay gap reporting, HM Treasury agrees that reporting alone will not reduce the gap, but believes it is "too soon to make changes" and does not consider mandatory action plans "fair or effective".
- On salary bands in job adverts, HM Treasury does "not believe that moving directly to legislation is appropriate at this time", saying it makes sense to first learn from other countries' experience.
- On data reporting and target setting, the PRA and the FCA each say they will consider the Committee's recommendations alongside consultation responses when finalising policy, and the PRA says "no decisions have yet been made".