Challenge to the glass ceiling

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In the group's latest benchmarking survey of 'female friendly' workplaces, investment banks scored an average of 31%, compared to an average across all sectors of 60%.

Investment banking ranked particularly low on changing behaviour, communicating ownership of policies designed to help women and for demonstrating commitment.

'The City firms come at the bottom of the list in terms of sophistication of cultural change,' says Opportunity Now spokesperson Zina James.

Indeed, results within investment banking were so gloomy that the group has decided not to publish a full league table of the benchmarking survey, for fear of dissuading more banks from joining.

So far, membership of Opportunity Now is one cause for optimism - up from four investment banks a year ago to 10 today.

Certainly, City of London employers are increasingly aware that there is a genuine issue to be addressed and that they themselves will be the losers, if they don't take it seriously.

Sir David Walker, chairman of Morgan Stanley Dean Witter and a member of the steering committee of Opportunity Now, says: 'The constraint on development of most firms in the City is the lack of high quality middle management and high quality senior people. When you state the constraint in these terms, then it seems ridiculous, to put it aggressively, not to be hungry for women.'

The establishment, stuffiness and misogyny are the only reasons why women's talents remain under-utilised, he said.

'There are no good reasons for it and there is nothing original to say about it. Women are discriminated against in the City for the same reasons they are discriminated against elsewhere. But it is changing fast.'

Apart from the war for talent, the danger of legal action is also providing a powerful wake-up call to employers. Sex discrimination cases filed by senior women have hit the headlines on both sides of the Atlantic in recent months and have proved costly in terms of both money and damaged reputations for the firms involved.

In New York, lawyer Wayne Outten says he has received calls from 30 Wall Street women in the past month, following the high-profile case of Allison Schiefflin, a principal at Morgan Stanley Dean Witter.

Schiefflin was found by the US Equal Opportunities Commission to have been discriminated against by being excluded from men-only social events and passed over for promotion to managing director. Morgan Stanley continues to deny the allegations of discrimination, but faces a pay-out to Schiefflin which could run well over $100m (&#8364105m).

While payouts in London are less dramatic, they are still significant. Hugh Tidbury, managing director of the chemical group at Deutsche Bank in London, cost his employer 1m last year, after publicly suggesting to his colleague Kay Swinburne that she was 'hot totty' and insinuating that she had slept with a client.

Swinburne resigned from Deutsche, sued and won but appears subsequently to have left investment banking, while Tidbury remains at Deutsche.

The rise in sexual discrimination cases is attributed by lawyers to a combination of the rise in the numbers of women and their increased confidence. 'There are now more women in the City and employees are more conscious of their rights and prepared to take advantage of those rights,' says Naomi Feinstein, an employment lawyer with City of London firm Lovells.

Meanwhile, not a day goes by without news of some new initiative aimed at attracting and keeping women in banking.

Salomon Smith Barney recently ran a conference on women's issues, Deutsche Bank is training 2,500 managers in recognising and avoiding discrimination and 16 larger banks in the City of London are participating in Capital Chances, an initiative to attract more female graduates.

'When I talk to my competitors, they are all interested in improving the lot of women,' says Morgan Stanley's Walker. 'Opportunity Now's annual benchmarking is very powerful. It instils a sense of competition among firms, a sense of 'why are we lagging behind?'