By 2030, at least 50% of senior leaders must come from lower socioeconomic backgrounds.
The organisation that oversees London’s Square Mile has told banks and other financial and professional services companies to have a majority of their senior management team from a working-class or lower socioeconomic background by 2030. A City of London Corporation report published on Wednesday has highlighted that accents and family origins still play an influential role in the career paths followed by people in the financial sector. Employees from these backgrounds make up only 36% of the senior leadership population. These positions fall under Board/Executive Committee/Partner level or two levels down.
The minimum target was part of recommendations for top firms undertaken by City taskforce on socio-economic diversity set up Treasury and Department for Business in 2020.“Where someone comes from, how they sound when they speak or what jobs their parents did should not determine how far they can progress within the financial services sector,” said Catherine McGuinness, co- chair former corporation policy chief.
The task force expects that all businesses in both sectors will have started collecting details about employees’ social class background by 2030.According to the Corporation’s findings on this issue about one half of all non-professional staffs in finance organisations,outside middle class and intermediate, are seen as slower climbers than richer competitors.
According to data analysed for the report, those from non-professional backgrounds can be paid £17,500 less per year than their peers who come from professional families.The document states that “people from working-class backgrounds do not have access to similar opportunities with those professions ,and those already born well off remain so”- due to UK being among countries with low social mobility rates in developed world. The task force's report is based on industry-wide consultation.McGuinness says she does "not expect our input be light reading or our suggestions universally accepted".
The task force presented its recommendations for companies, regulators and the government by 2030. These would include establishing and suggesting to regulators mandates targets for enhancing working-class representation in senior positions and allocating executives who will ensure that it happens. “For far too long, personal growth has been restricted by people’s socio-economic backgrounds,” said Andy Haldane, former Bank of England chief economist and task force co-chair.
“The present set of recommendations represents a break from the past.” In 2025, the taskforce which worked on this paper with more than one hundred representatives from the industry is going to reassess these economy-wide targets as they become less realistic.