Many large UK banks have received criticism for their gender pay gaps, and this has been an area of strong interest for us given the documented link between financial performance and diversity. We engaged with this major bank with the key objectives of understanding what was being done by the company to address gender diversity, in addition to more general steps to improve oversight and change the culture of the firm.
Between 2018 and 2019 our dedicated ESG team held several meetings with the company’s management and chairman. During these meetings we stressed the importance of addressing these sector wide issues and asked what the bank was doing to address them. We then followed these engagements up by attending a collaborative investor roundtable on the bank’s corporate governance.
As a result of these engagements, it was felt that the bank had been addressing these issues and was on a positive ESG trajectory. The bank had attempted to improve its gender balance through initiatives such as the ‘Come Back’ program, targeted primarily at women returning to work following a career break. Evidence of the banks progress is demonstrated by the appointment of a female chief executive in 2019, becoming the first major UK lender to do so. Attempts have also been made to change the culture of the firm, with staff training sessions around culture and removing bonuses from frontline staff in order to prevent incentives for ethical violations. Based on this, we are satisfied that action is being taken, and we will monitor the company to look for progress in the firm’s diversity metrics.