The body that oversees London’s Square Mile has told banks and other financial and professional services companies that at least half of their senior leaders should come from a working-class or lower socio-economic background by 2030.
In a report on Wednesday, the City of London Corporation said accents and parentage still dictated career progression in the financial sector as it found just 36 per cent of senior leadership positions were held by staff from a working-class or lower socio-economic background.
Such roles are defined as being at board, executive committee or partner level and two levels below.
The City of London’s socio-economic diversity task force, which the Treasury and business department commissioned in 2020, said the minimum 50 per cent target was aimed at ensuring class diversity at the top of companies spanned the whole sector.
Catherine McGuinness, co-chair of the task force and former corporation policy chief, said: “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.”
By 2030, the task force also expects all organisations in both sectors to have started collecting data on workers’ socio-economic background.
The corporation’s report found that although about half of all financial services employees were from non-professional backgrounds — defined as working class or intermediate — they progressed through companies slower than their more affluent peers.
Employees from non-professional backgrounds were likely to be paid up to £17,500 less a year than colleagues from professional backgrounds, according to data used by the report.
The report warned that the UK had one of the poorest rates of social mobility in the developed world, meaning “people from working-class backgrounds do not have access to the same opportunities as those from professional backgrounds, and those who are already economically advantaged tend to stay at the top”.
The task force’s report follows an industry-wide consultation. McGuinness said she was “not expecting our output to be comfortable reading, nor our recommendations to be universally acclaimed”.
The task force has made a series of recommendations for companies, regulators and the government to meet by 2030. These include setting and suggesting regulators mandate targets on boosting working-class representation in senior roles and assigning executives responsibility for ensuring the shift occurs.
Andy Haldane, former Bank of England chief economist and co-chair of the task force, said: “For too long, personal growth has been constrained by people’s socio-economic background. Today’s recommendations signal a break from the past.”
The task force, which worked with more than 100 representatives from the sector on the report, will review the sector-wide targets in 2025 to ensure they are still realistic.