The number of whistleblower reports made to the Financial Conduct Authority regarding sexual harassment more than tripled in the past year.
According to employment and partnership law specialists Fox & Partners, in 2020 to 2021, there were three reports about sexual harassment versus 10 in 2021 to 2022.
Fox & Partners said the increase comes as employees are spending more time in the office, following the end of social distancing, and are socialising with colleagues outside of working hours.
Previously, sexual harassment allegations had been associated with social events, such as summer or Christmas parties, where alcohol is often consumed.
Fox & Partners said the fact that sexual harassment reports are beginning to rise again highlights the importance for financial services firms to have appropriate systems and controls in place.
Not only will these help to minimise the risk of sexual harassment occurring in the first place but will also ensure any complaints are dealt with promptly, properly, and thoroughly.
Catriona Watt, partner at Fox & Partners, said: “Sexual harassment reports are beginning to edge up as financial services employees spend more time in the office.
“The CBI scandal shows just how damaging allegations in this area can be to an organisation and how a poor workplace culture where misconduct can thrive can lead to severe problems.”
The FCA has taken an increasingly hard-line approach to sexual harassment, including using the Senior Managers and Certification Regime (SMCR) to hold individuals to account.
Behaviour such as sexual harassment is considered when assessing whether managers are deemed ‘fit and proper’ to do their jobs.
Serious breaches of conduct may result in fines or even a ban from working in financial services.
The firm said this approach from the regulator may also encourage employees to feel confident in speaking up where they are subject to or witness inappropriate conduct.
Watt said it is important that senior management within financial services firms make it clear that sexual harassment will not be tolerated and that this message comes from the top.
She said messaging must be strengthened with fair and comprehensive processes for dealing with sexual harassment claims.
“When it comes to tackling the issue of sexual harassment, it’s vital that companies have in place proper systems and processes to identify and properly investigate harassment claims,” she added.
“Effective procedural safeguards that protect accusers, clear guidance on dealing with alleged perpetrators fairly, and reporting properly to stakeholders at all stages of the process are essential.”
The regulator’s discussion paper on diversity and inclusion in the financial sector looked at non-financial misconduct, including whether the FCA should develop further guidance to help firms tackle it.
A spokesperson for the FCA, said: “Non-financial misconduct – including sexual harassment - is misconduct, plain and simple.
“We continue to focus on culture in firms and take whistleblowing reports very seriously. We will act where we see behaviour that creates unsafe or unhealthy cultures.”
Last week, the FCA published a paper setting how it can support all whistleblowers, including those who wish to report non-financial misconduct.
sonia.rach@ft.com
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