Jayne-Anne Gadhia, the chief executive of Virgin Money, has pointed the finger at Goldman Sachs and JP Morgan for failing to sign up to the government-backed charter to promote gender balance in the City.
Gadhia, who designed the 10-point charter to boost gender equality in the financial sector, did not name the two banks but told MPs on the Treasury select committee: “There are two investment banks that I would have liked to have signed up that haven’t yet.”
An update to the 141 signatories to the “women in finance charter” dated Tuesday [pdf] shows JP Morgan and Goldman Sachs have yet to add their names.
Gadhia was addressing the select committee at the start of a new inquiry into women in finance.
She told MPs there was a “pervasive” sexism in the financial services industry and began by recalling an incident she outlined in her book, published earlier this year, where she described the experience of a female colleague at Royal Bank of Scotland who believed she was expected to sleep with her manager. Gadhia quit RBS in 2006, before its taxpayer bailout.
She was speaking on the day it emerged that Virgin Money was in talks to appoint a female chair – Irene Dorner, who used to run HSBC’s US operations – in a move that would make it one of the few companies in the FTSE 350 to have an all-female team at the top. Virgin Money would not comment on the report.
Signatories to the women in finance charter must commit to link executive pay to goals to improve gender equality in their organisations. Gadhia dismissed as “nonsense” the excuse given to her by one of the investment banks, which insisted it could not sign up because it was a global business.
Firms that did not sign up to the charter were driven by profit motives, she said. Gadhia called on MPs to summon them to explain their reluctance.
“Business has a responsibility to society and the organisations that have signed up appear to adhere to that view ... The organisations that are more insular and driven by their own profit motive see that as a less important point,” said Gadhia.
One of the highest-profile and most senior women in the banking sector, Gadhia told the MPs about her discussions with senior men. She said one male executive had told her he was worried about promoting women because they got pregnant, while the head of an insurance company insisted he could not find women who were good enough for senior roles. It was important to “call out” such attitudes, said Gadhia.
She also talked about formal City dinners at the Mansion House – where figures such as the Bank of England governor, Mark Carney, give set-piece speeches each year. She said the events were dominated by “men in a dinner suit ... It’s shocking.” Gadhia suggested that half the invitations for these dinners should be sent to women.
To encourage firms to focus on the gender issue, she said companies should be required to include reports on diversity in their annual reports in the same way as they update investors on environmental issues. Banks could be required to hold more capital if their boardrooms are not diverse.
The select committee has expressed concern about the lack of women on senior committees at the Bank of England. There are no women among the 11 members of the financial policy committee, which monitors financial stability, and only one woman on the the Bank’s 12-strong prudential regulation committee, which polices banks and insurance companies. The Bank of England signed the diversity charter this week.
JP Morgan said: “We’re supportive of the goals of the charter and are open to signing it as the programme develops.”
Goldman Sachs said it was “supportive of this review from the outset and endorse its objective of increasing the representation of women in senior management roles in financial services”.
