Bank bosses will have their bonuses on the line if they don’t hire more women in senior roles in a radical move to address gender inequality in the industry.
The proposals to be unveiled by the Treasury on Tuesday are the expected result of a nine-month investigation into banking, which is the sector with the highest pay but also the biggest gender pay gap in the UK.
The measures, first announced in November, are expected to include banks reporting publically on gender diversity, setting their own targets and appointing an executive to oversee gender, diversity and inclusion. They will rely on banks volunteering to comply.
Janye-Anne Gadhia, chief executive of Virgin Money, conducted the review for the Treasury.
Gadhia said in November: “It should be a wake-up call to everyone in financial services that fewer women progress to senior levels than in any other industry in the UK.
“There are many views as to why that might be. Motherhood, remuneration, the ‘old boys’ network’ are all mentioned, but only scratch the surface of an issue that has been hidden for too long."
Female bankers earn 40 per cent less than men on average, according to a study by the UK Commission for Employment and Skills published last year.
The study found that women across all industries earn 19.1 per cent less than men on average.
Discrepancies in pay have been found at every level of a woman's career. Female graduates earn £8,000 less a year than male graduates from the same degree, according to figures by the Equality and Human Rights Commission.
The world's 15 most powerful women in 2015
The world's 15 most powerful women in 2015
1/15 Angela Merkel - German Chancellor
German Chancellor Angela Merkel has retained her number one ranking for topping this year’s Forbes list for the fifth consecutive year and ten times in total.
2/15 Hillary Clinton - Presidential candidate, United States
Clinton, who could become the world’s most powerful leader in 2016, has been featured on the list every year since it launched in 2014.
3/15 Melinda Gates - Cochair, Bill & Melinda Gates Foundation
Melinda Gates has cemented her dominance in philanthropy and global development to the tune of $3.9 billion in giving in 2014 and more than $33 billion in grant payments since she founded the Bill & Melinda Gates Foundation with her husband in 2000.
4/15 Janet Yellen - Chair, Federal Reserve, Washington, United States
Janet Yellen made history in 2014 when she became the first female head of the Federal Reserve.
5/15 Marry Barra - CEO of General Motors
Mary Barra made history by becoming the first female CEO of General Motors.
6/15 Christina Lagarde - Managing director, International Monetary Fund
Christine Lagarde is entering the last year of her first term heading the International Monetary Fund (IMF), the organisation which serves as economic advisor and backstop for 188 countries. Under Lagarde the IMF has supported efforts to increase female labor force participation as way to reduce poverty and inequality. The UK, Germany, China, France and Korea have endorsed Christine Lagarde for another term as the head of the IMF.
7/15 Dilma Rousseff - President, Brazil
Dilma Rousseff, who has been elected in 2010, is Brazil's first female president.
8/15 Sheryl Sandberg - COO of Facebook
Sheryl Sandberg, Facebook COO and author of bestseller “Lean In,” joined the company in 2008 and became the first woman on its board four years later. Sandberg helped the social network go public and expand digital revenue.
9/15 Susan Wojcicki - CEO of Youtube
Susan Wojcicki is CEO of YouTube, the world’s most popular digital video platform used by over a billion people across the globe. She oversees YouTube's content and business operations, engineering, and product development.
10/15 Michelle Obama - First lady, United States
Michelle Obama, the 44th first lady of the United States has focused her attention on issues such as the support of military families, helping working women balance career and family and encouraging national service.
11/15 Park Geun-hye - President, South Korea
Park Geun-hye is the first female leader of a country that has the highest level of gender inequality in the developed world. In her inauguration speech, she promised to prioritise both national security and economic revitalisation.
12/15 Oprah Winfrey - Actress, Director/Producer, Entrepreneur, Personality, Philanthropist
Oprah Winfrey, a former queen of daytime TV has proven she can thrive without a talkshow. Her 'The Life You Want' tour sold out stadiums from Newark to Seattle in 2014.
13/15 Ginni Rometty - CEO of IBM
Ginni Rometty joined IBM in 1981 and later became the first woman to lead the company.
14/15 Meg Whitman - CEO of Hewlett-Packard
Meg Whitman is the only woman to have headed two large U.S. public companies: eBay and Hewlett-Packard.Until Marissa Mayer's arrival at Yahoo, she was the only female head of a leading Internet-based company.
15/15 Indra Nooyi - CEO of PepsiCo
Indra Nooyi is Chairman and Chief Executive Officer of PepsiCo. Mrs. Nooyi leads one of the world’s largest convenient food and beverage companies, with 2008 annual revenues of more than $43 billion.
Female graduates typically start on salaries between £15,000 and just under £24,000 while their male counterparts earn more than £24,000. In law, the gap widens, with women earning £20,000 after graduation and men taking home £28,000.
Laura Carstensen, an EHRC commissioner, said that women should not face these kinds of injustices, especially when data shows time after time girls and women are outperforming males at every stage in education.
“45 years after the Equal Pay Act was brought in to herald an end to gender pay inequality, our research provides clear evidence that the old economic and societal barriers are still prevalent for working women and overshadowing the prospects of our girls and young women yet to enter the workplace," Carstensen said.