New report calls on UK financial and professional services firms to boost number of working class senior leaders
The UK financial and professional services sector must act now to boost socio-economic diversity in the boardroom, urges a report published today by the City of London Corporation-led Socio-Economic Diversity Taskforce. Setting a sector-wide goal of at least half of senior leaders in the UK financial and professional services sector coming from a working class or intermediate background by 2030, the report has recommendations to help achieve that.
The taskforce – which was commissioned by HM Treasury and the Department for Business, Energy, and Industrial Strategy in 2020 – has now set out an action plan to tackle poor rates of social mobility in the UK and, specifically, the lack of socio-economic diversity at the top of UK financial and professional services.
While around half of all employees in the sector are from non-professional backgrounds, defined as working class and intermediate backgrounds, these employees progress 25% slower than their peers. Only 36% of working class and intermediate employees have climbed the ladder to senior levels. Employees from non-professional backgrounds are also likely to get paid up to £17,500k less per year – with zero link to job performance.
The taskforce’s final report outlines a pathway for firms to level the playing field and boost representation at senior levels of the sector. It was produced after extensive research, an industry-wide consultation, case studies from leading employers, and recommendations from organisations including the Social Mobility Commission, Social Mobility Foundation, Sutton Trust, Social Mobility Business Partnership, and Bridge Group.
Data held by the taskforce shows that 37% of senior leaders in the UK financial and professional services sector are currently from non-professional backgrounds. The target of boosting this level to 50% of senior leaders by 2030 will be reviewed in 2025 to ensure it remains representative and achievable. By this time, the taskforce expects all organisations in the sector to have started to collect data on the socio-economic background of their employees, which will provide a better-informed baseline.
The report also includes recommendations on how regulators, sector bodies and government can support and incentivise employer action on this journey.
The report will be launched at an event today (30 November) at the Guildhall with over 200 attendees including business leaders, industry bodies, regulators and government representatives.
Chair of the City of London Corporation-led Socio-Economic Diversity Taskforce, Catherine McGuinness, said:
“It is vital that UK financial and professional services firms act now to enable talented people to rise to the top whatever their background. We need to break the “class” ceiling - removing unfair barriers to progression is not only the right thing to do, it will enable firms to boost productivity, retention levels and innovation. Using this practical guidance and setting ourselves stretching goals, we can bring about change, ensuring a fairer and more equitable sector for all.”
The taskforce is also calling for UK financial services firms of all sizes to a to join the newly launched membership body, Progress Together. The body is the first of its kind to focus on progression and retention to improve socio-economic diversity at senior levels in the financial services sector.
Co-Chair of the Socio-Economic Diversity Taskforce and Chair of Progress Together, Alderman Vincent Keaveny, said:
“Socio-economic diversity is key to all sectors. It is vital that firms take action to create a more equitable pathway to the top for people from all backgrounds. I am excited to continue this great work as Chair of Progress Together so we maximise the potential of talented people and boost productivity.”
The taskforce has also published a separate report – a first of its kind – today looking at the business benefits of increased socio-economic diversity at senior levels in UK financial and professional services. The report looks at ways increased socio-economic diversity, particularly at senior levels, can have positive benefits on productivity, innovation, talent, intersectionality and license to operate. For example, there is evidence to show that the profits of organisations focusing on socio-economic diversity are 1.4x higher than their competitors.
Co-Chair of the Socio-Economic Diversity Taskforce, Andy Haldane, said:
“We cannot grow as a country unless people grow. For too long, personal growth has been constrained by people’s socio-economic background. Today’s recommendations signal a break from the past, with financial and professional services playing a leading role in unleashing the potential in people, organisations and the economy at large.”
Co-Chair of the Socio-Economic Diversity Taskforce, Sandra Wallace, said:
”The industry’s willingness to collaborate on tackling the barriers to promote people from lower socio-economic backgrounds into senior levels is unprecendated. It marks a long awaited shift in the priorities of our sector and recognises the business and moral imperative to change. I’m immmemsely proud of the industry’s response to this pressing need. Now it’s time to turn our words into action, and instigate the real change required to transform our sector into a beacon for inclusivity in the workplace.”
The report is available to read here.
Notes to editors
About the City of London Corporation
The City of London Corporation is the governing body of the Square Mile dedicated to a vibrant and thriving City, supporting a diverse and sustainable London within a globally-successful UK. www.cityoflondon.gov.uk