The Treasury select committee criticised the 'alpha male' culture in financial services, including the presenteeism and bonus negotiations.
To address this, the committee said bonuses should be assessed in a formulaic way against clear objectives.
The committee also called on more senior men to begin working flexibly to lead by example.
It also recommended extending the reporting of the gender pay gap to partners and subsidiaries and a review of promotion practices to remove unconscious biases and groupthink.
Nicky Morgan, the committee’s chairman, said: "The reporting of gender pay gaps at financial services firms confirms that a large gap exists between men and women working in finance, in part due to significantly more men than women in higher earning and more senior positions.
"The next step must be for firms to set out how they will abolish their gender pay gap and support the progression of women.
“Firms should focus on changing the culture in financial services firms, which remains a deterrent for women, especially in the bonus culture.”
The committee’s inquiry found only 23 per cent of board members – of 200 firms in the financial services sector – were women.
But the inquiry found this disguised the fact only 7 per cent of boards had female executive directors, with women more commonly found in non-executive roles.
Where women were in executive positions, these tended to be in support functions such as human resources, marketing, communications and strategy.
The committee heard evidence of a 'permafrost' in mid-tier positions at companies where women did not progress.
MPs also heard companies in the top quartile of gender diversity were 15 per cent more likely to have financial returns above their national industry median.
The committee's report criticised various aspects of the culture at financial services firms, such as presenteeism, and misconceptions about the fact flexible working led to lower productivity.
The MPs also said bonus negotiations tended to favour men, who were likely to argue more forcefully for bonuses than women.
The report added: "Maternity leave can have a negative impact on women's confidence and many women who return from maternity leave accept roles that are less financially rewarding or more junior than the roles they held previously.
“Employers can also make assumptions about how women perceive their careers when they return from maternity leave and may not offer them the same opportunities.”
The report recommended wider use of returners schemes and training opportunities for women coming back from maternity leave.
It also addressed how to encourage more girls to study relevant subjects at school and said the government and the industry should work with schools, further education organisations and career organisations to make this happen.
This could include, the report stated, making sure girls are aware of the career paths available to them in financial services and where these may lead.
Kirsty Lynagh, chief people officer at Nucleus, said: "This report is an important step in the continuing challenge to improve the diversity of those who work in financial services industry, and we are encouraged to see many of the recommendations back up Nucleus’s initiatives in this area.
"Having a more diverse workforce brings many benefits to an organisation, not only financial, but in a better – and more productive - working environment for everyone. This isn’t a box-ticking exercise for us, it is about being future relevant and durable.
"Although the Treasury select committee has concluded there is currently an under representation of women in senior positions in financial services, I strongly believe the culture and attitude of our industry is changing for the better."
damian.fantato@ft.com
