Hire women? No thank you, says City

SHE wasn't the first, but Nicola Horlick hit the headlines eight years ago as a multi-millionaire investment manager juggling a high-flying career with raising five children.

It seemed that the supposedly impenetrable glass ceiling of the City had at last been shattered. Not only were women - and working mothers at that - taking leading roles in the Square Mile, but investment banks, fund managers and brokers were falling over themselves to parade their 'female-friendly' credentials.

City institutions are still preaching sexual equality, but something quite different is going on behind the scenes. Senior executives are now daring to whisper that they are no longer willing to employ women in senior positions.

Headline-grabbing lawsuits against big financial institutions from women who claim to have been harassed, passed over for promotion or treated unfairly when they had children are sparking a damaging backlash.

As Elizabeth Weston, 30, arrived in court last week with a fresh complaint against giant investment bank Merrill Lynch, which reportedly paid her a £1m out-of-court settlement for discrimination last year, one top City executive said: 'My US operation won't touch them with a barge-pole. They think it's too risky to employ women in decent positions.

'Here, even when I'm sure we can win a case, my lawyers say the damage to our reputation from fighting a sex discrimination suit is not worth it. So we settle out of court.'

Despite the endeavours of financial institutions, swathes of the City echo to the coarse language of the locker room, where male executives network effortlessly to gain promotion and women are often regarded as sex objects - wheeled out if it is felt a little feminine charm will help clinch a deal.

Five years ago, broker Icap banned employees from claiming lap-dancing on their expense accounts. Such moves were expected to overturn the macho culture. But women are now paying a price for diversity. One senior manager at Merrill Lynch said: 'Life at Merrill is good if you're a woman. Nobody wants to upset a female employee in case she charges sexual discrimination.

'I have been forced to accept somebody who isn't good enough just because it is cheaper to keep her in her job rather than risk making a settlement. The situation can't stay like this.'

Last year, the number of cases taken to employment tribunal for sexual discrimination in the UK almost doubled from 8,128 to 14,284. And in the boilerhouse atmosphere of City dealing rooms, where millions can be gained or lost in a fraction of a second, few would deny that

temperatures run high. Bosses admit that a woman who wants to sue will rarely be short of examples of offensive behaviour.

But they dismiss the banter as letting off steam. Women who can rise through the rough and tumble of dealing and broking should be able to deal with it, they say.

Former Goldman Sachs banker Angelique Todesco, who left the City after 15 years to sell properties in Spain, said she learned to cope with harassment. 'You have to manage the culture whether you are a man or a woman and deal with it,' she said. 'The world of banking is tough and women have to be tougher than the men. If someone does something to offend you, take them aside and talk to them. I always found it worked.'

Julie Mellor, head of the Equal Opportunities Commission, says employers allow such behaviour at their own cost. 'Good employers in the City are increasingly concerned about the impact of court cases on their ability to recruit women and men, who both express concerns about how fairly they will be treated.

'Of course we are concerned about the possibility of unlawful discrimination in recruitment, but employers who say women have become untouchable because of the threat of lawsuits are throwing up a smokescreen. Employers can and do fight claims they think do not have merit.'

But cases are not always so clear-cut. Not long after Clara Furse was appointed to head the London Stock Exchange, a vicious whispering campaign about her private life engulfed the City.

Her lawyers could threaten newspapers with gagging orders, but even Furse, possibly the most influential woman in the Square Mile, could do nothing but wait for the vituperative tongue-wagging of her male adversaries to die down.