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Mind the gap: London’s financial sector told to tackle class prejudice

Mind the gap: London’s financial sector told to tackle class prejudice

By 2030, at least 50% of senior leaders must come from lower socioeconomic backgrounds.

The organisation in charge of London's Square Mile has advised banks and other financial and professional services firms that by 2030, at least the majority of their senior leaders should be from a working-class or lower socioeconomic background. According to a report released Wednesday by the City of London Corporation, accents and parentage continue to dictate career progression in the financial sector. Employees from a working-class or lower socioeconomic backgrounds hold only 36% of senior leadership positions. These roles are classified as a board, executive committee, or partner level and the two levels below.

The City of London's socioeconomic diversity task force, commissioned by the Treasury and business department in 2020, stated that the minimum 50% target was intended to ensure class diversity at top companies spanned the entire sector. "Where an employee comes from, how their accent sounds, or what jobs their parents held, should not dictate how far they progress in the financial and professional services sector," said Catherine McGuinness, co-chair of the task force former corporation policy chief.

The task force anticipates that by 2030, all organisations in both sectors will have begun collecting data on workers' socioeconomic backgrounds. According to the corporation's report, despite the fact that roughly half of all financial services employees came from non-professional backgrounds — defined as middle class or intermediate — they advanced through companies at a slower rate than their more affluent peers.

Employees from non-professional backgrounds may receive up to £17,500 less in annual compensation than counterparts from professional backgrounds, according to the data analysed for the report.The report asserts that because the UK has one of the lowest rates of social mobility in the developed world, "those from working-class backgrounds do not have access to the similar opportunities as those from professional , and those who are already economically privileged tend to stay at the top."  The task force's report is the result of an industry-wide consultation. McGuinness stated that she "doesn't expect our output to be easy reading, nor our recommendations to be universally acclaimed."

The task force has issued recommendations for businesses, regulators, and the government to follow by 2030. These include establishing and recommending to regulators mandate targets for increasing working-class representation in senior positions and assigning executives responsible for ensuring the shift occurs. "For far too long, personal growth has been constrained by people's socioeconomic background," said Andy Haldane, former Bank of England chief economist and task force co-chair.

Today's recommendations represent a departure from the past." The task force, which collaborated on the report with more than 100 industry representatives, will review the sector-wide targets in 2025 to ensure they remain realistic.