The proposals raise issues of interest to financial institutions, particularly in light of the proposed requirement for firms to publish details of gender bonus gaps.
Indeed, recent research carried out by recruitment firm Astbury Marsden revealed that women working in the City receive an average bonus corresponding to a fifth of their base salary as compared to a third for men.
In addition, as pay data information will need to be signed by a director to confirm its accuracy, this may have ramifications for those in scope of the Senior Managers Regime (SMR). Under the SMR, senior managers must take reasonable steps to ensure that any delegation of responsibility is to an appropriate person and to oversee the discharge of the delegated responsibility. Firms will need to ensure that they have clear methods of delegating the discretion exercised when awarding bonuses and a robust supervision mechanism.
Financial institutions should consider implementing a vigorous grading system and analytical job evaluation. It is also prudent to monitor how line and middle management’s discretion is exercised and to ensure that any systematic reward based on discriminatory assumptions and stereotyping is eradicated. Given the current climate, firms should also develop a communications strategy to deal with the release of gender pay figures. Firms need to ensure that they are looking at this issue now and putting measures in place to minimise the risk of adverse publicity when gender pay gap figures are published.