Not long ago, I shared my thoughts on the #MeToo movement in Finance News. Since then, we have seen the hashtag campaign extend to Bollywood in India and tech giants such as Google, exposing a culture that spread far beyond what one could have imagined. Below you can read the full article or see the press release here.
It’s already been more than a year since the Weinstein scandal rocked the world of show business, leading thousands using the now infamous #MeToo to share their experience of sexual harassment. Unfortunately, as we now know, the issues extend way beyond film, to other industries including finance.
Despite often having strict policies in place, numerous banks found themselves just as implicated in the fallout of Harvey gate. With the effects still being felt today, the sheer scale of #MeToo means that those in banking, perhaps more than in any other industry, leave themselves open to a greater degree of commercial and reputational damage. This is, after all, a sector ingrained in longstanding stereotypes of Bullingdon style boys’ clubs and seedy strip bars.
With these cultural perceptions hard to shift, simply drawing up a new set of compliance policies and list of behavioural standards is not going to cut the mustard in this #MeToo era. Any whiff of an incident, even if proven to be untrue, could have a double whammy effect on a bank’s share price. Sensitive shareholders do not need an excuse to dump banking stocks these days. So, any sign of serious cultural wrongdoing could very quickly send a bank’s stock plummeting.
The problem for so many of these banks is that, far from new guidelines stamping out inappropriate behaviour, there is evidence to suggest it is still rife. Recent findings from our surveillance systems show that a trader is eight times more likely to swear or use offensive language than they are to use any language suggesting market abuse. Indeed, some of these profanities are related to extremely derogatory conversations around sexual orientation, race, physical appearance and political ideologies.
Whether it’s the heads of trading desks or senior managers, someone within a bank has to quickly take responsibility for these incidents. But as is so often the case, those not directly responsible for the problem are the ones tasked with trying to solve it. Compliance officers are currently the ones seeking out ways to directly point to incidents where inappropriate conversations have taken place.
The trouble is that these incidents are happening over numerous channels - from instant messenger to the more traditional email and phone forms of communication. And the task is much harder than simply selecting dodgy keywords and odd conversations, compliance now has to gather context from words used with a certain proximity to others, or from variations of the root words.
Compliance officers doubling their efforts to wipe out any offensive innocents is clearly an important step in the right direction. However, the responsibility cannot, and should not, fall solely at the feet of compliance. Unacceptable trader chat has not gone away, and with shareholder pressure mounting, senior managers within financial institutions also need to step up.
Any scandal or even alleged incident could have an instant negative effect on the reputation and therefore valuation of any bank. Those at the top table within financial institutions need to be able to demonstrate that they’re holding their employees and themselves accountable. #MeToo means that commercially, morally and reputationally they have no choice, so, what are they waiting for?