There were no women traders present at the London Metal Exchange’s reopening at its 10 Finsbury Square home on 6 September — simply because there are no women traders in metals trading.
The women that were present, 18 months after the exchange, nicknamed ‘The Ring’ abruptly shut as the pandemic hit, were either the LME’s own staff or account executives working the phones to feed back pricing and take orders from clients around the world.
“It is fair to say that there isn’t the diversity that we, or indeed the members would like to see,” LME chief executive Matthew Chamberlain told Financial News.
But there are other upsides. Complaints about the firm’s boozy culture have ceased since Chamberlain rolled out a code of conduct in 2019, two years after he took up the chief executive post.
The final straw was a 2018 annual gathering of around 2,000 commodities traders from the global metals community, held at the Playboy club in London. London strip club Stringfellows told Financial News then that several visitors from the LME Week each year turned into regulars.
The club also tweeted adverts with an invite for punters: “Mention ‘LME Week’ at the door for complimentary admission and a drink!” Another adult strip club, Secrets, offered a similar advert: “Spent a long hard day at London Metal Exchange? At Secrets, we understand the need to kick back and relax.”
Politicians slammed the LME for being associated with the Playboy event, and helped prompt Chamberlain to roll out a 10-page code of conduct in 2018, the first in the exchange’s 142-history. It banned traders from drinking alcohol during work hours and emphasises the LME’s intolerance for harassment, humiliating or disruptive behaviour, including “inappropriate language related to gender”.
“If I knew that was going on in my organisation… that there were bad behaviours that created an unwelcoming environment, clearly, I would take action,” Chamberlain says, adding that there is more work that needs to be done. “The numerical disparity is obviously true — that’s a matter of fact,” he says, reflecting on the number of women in the sector.
City firms — as well as regulators — are particularly under pressure to improve their diversity rankings, forced to reckon with the dire shortage of black professionals among their ranks.
The LME aims to have 40% of its senior management team made up of women by 2025.
“I want the LME to be as inclusive as possible,” Chamberlain says, citing the pay gap as one of the early initiatives the organisation took to ensure fairness across genders.
Its gender pay gap for 2020 stood at 11.9% and 15.5% for the LME Group, a respective decrease of 7.5% and 6.7% year-on-year. The gender pay gap is though below the financial services sector average, which currently stands at 29.5%
“Gender pay gap reporting really forces you to confront that the challenges in your organisation. We’re definitely moving in the right direction.”
When it comes to the wider metals trading industry, there’s “a huge amount more still to do on under-represented ethnic groups”.
For the LME’s part, it has rolled out an apprenticeship programme in January in which it took its first cohort of apprentices from under-represented backgrounds, in the hope of fixing the issue.
“The idea is really to provide those people with as good as possible, a grounding in what the LME is, in what we do, give them exposure to all of our teams, or try and give them some real insight into the way our world works.”
To find suitable candidates, the LME partnered with an organisation that specialises in identifying talent from under-represented backgrounds.
The real challenge that lies ahead for the LME is staying open, and relevant.
“The Ring has the opportunity and the need to carve out a new existence for itself in, hopefully, a post-pandemic world.”
The organisation consulted among its members about whether to close since the electronic pricing continued during the pandemic, and proved to work well.
Half the market wanted to keep the Ring open, according to Chamberlain, which resulted in a compromise of keeping official prices on the Ring but deferring closing prices to electronic processes.
On the first day of opening, firms returned to trade with smaller teams, which was anticipated given the limited space within the Ring and areas surrounding it.
In anticipation, the LME changed the process to make only one session mandatory out of four.
The Kerb trading — or the fourth session — relates to closing prices, now done electronically, while traders are keen to make use of the first three sessions in person, albeit with smaller teams.
“There was this sense that the traders really want to make use of the Ring and be there through the morning, and do the official prices, and be there in the early afternoon.”
On day one, trading volumes were less than half what they would have been in pre-Covid times, Chamberlain said.
“That’s totally expected because a lot of the business happened in that Kerb period and that’s now much more electronic trading.”
The point of the Ring, Chamberlain said, is that while a large number of financial traders prefer electronic markets, many among dealers simply want the visibility that the Ring provides.
“It’s about the ability of anybody to come in. They can come and stand on the balcony and they can look at what’s happening that, and really feel comforted and feel reassured that there’s this real process. For many of our physical participants, they see that as more convincing and more compelling.”
Corrections and Amplifications: This article was updated to clarify only one session is now mandatory at the LME.
To contact the author of this story with feedback or news, email Penny Sukhraj