Life with the seedy men of the City

Bankers and dealers may get paid big bonuses, but their attitudes towards women are no more advanced than a spotty teenage male's, according to a new report

(Steve Ullathorne)

A dark-haired young woman gets up from her desk and walks towards the toilets, to catcalls from her male colleagues which include graphic jokes about anal and oral sex. She keeps walking, barely batting an eyelid. Like pornographic screensavers and lunchtime visits to strip clubs, obscene comments are par for the course for many women working on the trading floors of London's leading banks, according to a former investment banker, Kate Smurthwaite.

"Over and over again I wasn't taken seriously," said 34-year-old Ms Smurthwaite. "If I was angry I was 'on my period'; if I was happy I must have 'got some last night'." She claims that male colleagues refused to work for her because she was a woman and that she was repeatedly passed over for promotion. Like so many women who suffer sexism while working in the City, Ms Smurthwaite did not bring a tribunal against her employers. "We knew that if we spoke about it we would be ridiculed and attacked, and if you sued that would be the end of your career in the City."

A report published by the Treasury Select Committee yesterday exposes the sexism facing most women working in the City – from the 60 per cent pay gap between the sexes, to the dearth of women on boards and the failure of firms to implement successful flexible-working policies. While the report successfully highlights these problems, the committee has been criticised for failing to tackle them due to its reluctance to impose any compulsory equality targets on banks.

"It devolves responsibility to the City to remedy the problem, as reports did in the 1960s, since which time nothing has changed," said Lawrence Davies, of the solicitors Equal Justice. "People who profit from discrimination do not get their houses in order until there is an economic imperative to do so. The average award in a sex discrimination case is £12,000, the cost of an average corporate lunch."

Giving evidence to the committee, Harriet Harman, the Minister for Women and Equality, likened women City workers to animals, pointing out that companies give their customers information about their animal welfare policies, but not about the welfare of their staff.

The Women and the City report calls for firms to boost numbers of senior female employees or risk mandatory quotas being imposed, highlighting the economic advantages of having more women in senior jobs. It argues that a better gender balance could have countered the "group-think" which may have contributed to the financial crisis, and it recommends that firms conduct equal-pay audits and publish the results. It emphasises the importance of flexible parental leave for both men and women.

The report is also scathing about the body tasked with stamping out discrimination in workplaces, the scandal-hit Equalities and Human Rights Committee. "We have concerns about the way in which the EHRC fulfils its research function," said John McFall, chairman of the Treasury committee. "We were left feeling that there were quite a lot of gaps in their research. They need a push, we are looking to them to step up the pace."

The committee suggests that "the EHRC should be more rigorous in its approach to research – good policy requires good research" – and it warns that recent recommendations made by the EHRC could be "forgotten as soon as made". It also highlights the "stark contrast" between the EHRC's approach and that of the Financial Services Authority, whose chief executive talked of being "proactive and reactive" on the issue of equality, saying "when firms do not adjust their behaviours they can expect tough sanctions from the FSA".

The EHRC has recently been challenged by the Audit Commission over its use of public funds, hit by the resignation of senior staff and seen its chairman, Trevor Phillips, criticised by MPs. No one from the EHRC was available for comment.

However, despite criticising the EHRC, MPs asked it to monitor the progress of City firms towards greater equality rather than set banks binding targets. "It is really about changing the culture. Legislation doesn't work as it should, we need to change the culture. If results are not forthcoming, we might have to look at making it compulsory," Mr McFall warned.

Some believe that culture is so ingrained that law is the only way to bring about change. Ms Smurthwaite said: "When I told the human resources manager of a bank I worked for that I felt uncomfortable about my colleagues going to strip clubs with clients I was told that I had to learn to 'manage my exit'." Ms Smurthwaite recently gave up working in the City to pursue a career in another equally male-dominated field: comedy.

The 14-strong Treasury committee, which includes just one woman, also calls for more information to be revealed about sex discrimination cases brought against firms. Despite the handful of multimillion-pound cases which hit the headlines, only a tiny minority of claimants are successful and most sums awarded modest. In 2008-09, only 3 per cent of sex discrimination cases were won at tribunal and 42 per cent of cases were withdrawn before a final hearing.

The report warns that company executives often hire "in their own image", with homogeneous boards as a result, and that they don't choose applicants from a wide enough variety of sources. Some City workers reveal even more dubious recruitment processes. "When it came to recruitment, a lot of the time they recruited boys who were smart and girls who were pretty," said Ms Smurthwaite. "I heard senior executives say, 'We want a slim blonde one'."

Women currently account for just 9 per cent of board members for FTSE 100 banks and 1 to 2 per cent of executive directors of banks. With the Government reluctant to impose a "quota" system, female City workers are creating their own networks to help them advance, such as Women for Boards. This aims to increase the number of women on boards of FTSE top 250 and 350 companies by pairing potential female candidates with mentors, such asthe former newsreader and current non-executive director at Sainsbury's, Anna Ford. "A lot of these women's networks just teach women how to survive in this kind of culture rather than trying to change it," said Dr Sasha Roskoff, founder of the women's rights organisation Object. "That is what we need to address. The City is a bastion of power, traditionally male power, and they want to keep women out."

Case histories: Winners and losers in the fight against sexism

2009 Corporate banking manager Mona Awad settled out of court for an undisclosed sum after suing HBOS for £16.7m for sex, race and religious discrimination. Ms Awad claimed that in one incident her boss lifted up her trouser leg in front of staff to show them her leg.

2009 Rosemarie Corscadden lost her £5m claim against Crédit Agricole, after alleging her boss had had made sexual advances towards her.

2007 Andrea Madarassy lost a five-year legal battle against Japanese bank Nomura, which she accused of unfair dismissal, sexual discrimination and victimisation. Ms Madarassy said she was bullied for being pregnant.

2004 City lawyer Elizabeth Weston won £1m in damages from Merrill Lynch after suffering lewd comments from colleagues at a Christmas party.

2001 Senior analyst Julie Bower was awarded £1.4m after a tribunal agreed she was forced to resign when her boss at Schroder Securities awarded her a £25,000 bonus – while male colleagues received £1.5m – in an attempt to get rid of her.

2000 Kay Swinburne was awarded £1m after Deutsche Bank failed to prevent what the court called "a hostile environment", in which male colleagues brought escort girls to Christmas parties and called women "hot chicks".