Sexist City to face hard questions on diversity from Financial Conduct Authority

Firms with more gender diversity make more money, but parts of the City are still struggling to wake up to that

The City of London: Progress on diversity has been slow (Rex)

On current trends the global financial services industry will finally reach the figure of 50 per cent female representation on executive committees by 2107, some two hundred long years after the first female suffrage march on Parliament.

So said Megan Butler, one of the Financial Conduct Authority’s chief supervisors, in the keynote speech at a Women in Finance Summit.

Ms Butler said that progress is being made, and declared herself to be an optimist.

But that figure she quoted tells its own story: change is coming at the sort of pace even an arthritic tortoise would find embarrassingly slow.

What might give it a shot in arm is if financial firms were set targets for improvement.

Cue sharp intake of breath and a stream of but, but, buts from City bosses, most of whom would be apalled at the mere suggestion.

Their main argument against such a move can be summed up thusly: We need to hire the best whomever that may be, regardless of gender, race, sexuality, even disability. If the best we can find looks like 99 per cent of all our either employees, who are invariably white middle class blokes, then so be it. They'll get hired. We’re not in the business of making social justice. We’re here to make money.

That basically amounts to a great big steaming pile of tripe.

Hiring more of the best women would actually make them money (ditto the other groups that traditionally come under the diversity banner).

McKinsey, the management consultant, in January released research proving this. It found that that companies in the top 25 per cent for gender diversity were 21 per cent more likely to see higher than average performance than those in the bottom quartile (the figure for ethnic diveristy was even higher).

Ms Butler made the point that women as investors reliably outperform men by 1.11 per cent, with lower risk and volatility in their portfolios, leading to more money for their employers. Mixed-gender investment fund teams attract 6 per cent more inflows than teams run solely by men. Monoculture firms suffer 24 per cent more governance-related issues than their peers, and the latter can get very costly.

Far from losing firms money, targets forcing them to hire more women, and more diverse workforces generally, would actually serve to benefit their bottom lines, and perhaps by quite a bit.

At this point you sometimes hear a more subtle case made against them. It is said that women don’t like them any more than do men, even find them demeaning. It would be patronising and unpleasant for our high achieving women to be left with the impression that they had got their jobs as a result of a quota rather than through their own abilities!

Ms Butler freely admits that she used to be among those uncomfortable at the prospect of benefiting from discrimination. The creeping pace of progress has changed her mind.

She isn’t yet ready to force firms to start imposing targets. But she and her supervisors are preparing to “challenge on the steps being taken to achieve change” because “ultimately, embracing the value of diversity benefits everyone”.

Quite so. That might, nonetheless, make for some entertaining conversations, especially in the more hidebound parts of the City. I think I might rather enjoying being a fly on the wall.

Unfortunately that's impossible so I'll have to content myself with imagining the reaction to watchdogs posing the following question when old school bosses start harrumphing: What part of making money is it that you have a problem with?