Pay Disparity for Women in British Financial Firms

In July, I wrote that a British Parliament committee announced that it was going to investigate the number and pay of women working in financial firms.  Its stated reason was that it wanted to prevent another financial crisis in the banking sector.  It said it will “look at pay inequality, flexible working practices and the extent to which the culture of the City is sexist, as well as the prevalence of sexual harassment and exploitation.”  I also wrote that there was some empirical evidence that women had performed better than men during the financial crisis.

I wrote that the committee itself is part of the problem since it has only one female member and that it has already been criticized because it called mostly male witnesses to the banking crisis hearings last year.  In addition, the chairman of the committee has not promised to take any action to change things but merely said that he wants the issues to be discussed.

Well, it appears that the committee has found just the woman to support the status quo. Nichola Pease is deputy chairman and former chief executive of JO Hambro Capital Ltd, which is part of the Credit Suisse Group.  Ms Pease, along with her hedge fund boss husband, are featured at number 272 in the “Sunday Times Rich List” for 2009.  Ms. Pease just testified before the committee.  The two major points of her testimony that are being reported are that international financial companies do not like to hire British women because (1) British law offers new mothers 52 weeks of maternity leave and (2) there are unlimited penalties for successful sex discrimination claims.

Nichola Pease

Pease also said that “While we’d like to give everyone flexible working, certain jobs require full time, they require a lot of travel, unsocial conference calls to deal with, and those are the commercial realities. We need to live as a country with those commercial realities.”  So, essentially, Pease is saying that the old reasons for justifying differences in pay are correct.  Does she care nothing about women’s rights other than that she herself is making a huge amount of money?  Does she not care about the huge difference in pay of women working in fund management, stock brokering, and futures trading, which is reported by Britain’s Equality and Human Rights Commission to be as much as 60 per cent in pay, with a 79 per cent difference in bonuses?

However, on the positive side, the committee also heard from Charles Goodhart, who is a former Bank of England police maker and emeritus professor of finance at the London School of Economics. Goodhart said that the financial crisis in Britain may have been averted if more women served on bank boards: “There would have been less likelihood of the kind of financial crisis we’ve just had if there had been a larger number of women CEOs in the financial sector. I think less of the alpha male would be very beneficial.”