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Investment bank denies white men hiring rule

Men and women sit while waiting for job interview.
State Street has rejected claims about its hiring process. (Source: Getty)

A major international investment bank has rejected claims that managers need to get special approval to hire white men.

State Street bank on Monday described reports published in The Sunday Times as “factually inaccurate”.

The publication claimed State Street managers needed to get special approval if they were to pass over female or minority candidates for white male hires.

While the bank denied those claims, it does want to triple the number of Asian, Black and other minority staff occupying senior roles in two years, and will cut executive bonuses for those who fail to meet these targets.

“All of our leaders have to demonstrate at their annual appraisals what they have done to improve female representation and the number of colleagues from ethnic minority backgrounds,” State Street head of inclusion, diversity and corporate citizenship Jess McNicholas told The Sunday Times.

“This is now front and central for State Street — it’s on every senior executive’s scorecard.”

While the bank will hire white men, recruiters will need to ensure that other candidates are also interviewed. Additionally, the interviewers need to be part of a diverse panel, including at least one woman and preferably a person of colour.

State Street currently employs some 40,000 workers around the world.

State of play in Australia

A recent study by the Financial Services Institute of Australasia (FINSAI) found that more than half of female respondents have experienced or know someone who has experienced sexism or harassment in the workplace, compared to one third of men.

The study also found that while only 18 per cent of women in the industry believe organisations are transparent, that increases to more than 50 per cent among men.

“The findings of the survey beg the question, is the frustratingly slow progress we are making in areas of gender equality in our industry down to the different lived experiences of men and women in our industry?” FINSIA Diversity Advisory Council Chair Linda Maniaci said in a statement.

“We need to do more to ensure women are provided with the same career opportunities as men – particularly when they display the same leadership qualities as their male counterparts. We all need to work harder to challenge unconscious bias and myths regarding merit.”

The survey also assessed the gender pay gap by industry and found the financial and insurance services industry has a 27.5 per cent gap in total average remuneration, significantly higher than the all-industry average of 21.3 per cent.

Additionally, the report found that while 3 per cent of women believe the pay gap is “grossly exaggerated”, that leaps to 25 per cent among male respondents.

Fresh analysis by Sydney recruitment firm Talent Search Haus also found that 95 per cent of Australia’s biggest financial services institutions have a male chief executive.

What do the studies show?

Verve Super has announced it will allocate investments based on how companies measure up against four gender equality benchmarks.

These include pay parity, women in leadership, flexible work practices and workplace safety policies.

The female-led fund said it is using this lens to filter out underperforming companies, as companies that fail on diversity also tend to underperform financially.

Companies that have gender diverse executive teams are 21 per cent more likely to report above-average profitability, according to a 2018 McKinsey & Company study.

Conversely, those with poor gender and racial diversity are 29 per cent more likely to underperform.

A 2013 Centre for Ethical Leadership study found diverse workforces tend to exhibit stronger decision-making, employee engagement, productivity and creativity.

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