Lloyds Sets Target For Women Executives

Mark Kleinman, City Editor

Lloyds Banking Group is to break new ground in the debate about gender diversity in British business by pledging that 40% of its top 5,000 jobs will be occupied by women within six years.

Sky News can reveal this weekend that the taxpayer-backed lender will become the first FTSE-100 company to establish a formal gender target for its most senior management positions.

The pledge, to be outlined by Antonio Horta-Osorio, Lloyds' chief executive, in a speech next week, will come at a time of unprecedented scrutiny of boardroom diversity and governance.

Mr Horta-Osorio is expected to set the target as part of a broader set of objectives aimed at demonstrating Lloyds' awareness of its wider societal role as the UK's biggest high street lender.

Sources said that he was also planning to establish formal annual goals for lending to small and medium-sized businesses (SMEs) and to first-time house-buyers.

Targets for the number of female executives and a commitment to the level of funding for Lloyds' charitable causes would be made over a six-year period, they added.

It is the gender diversity target, which will entail the appointment of an additional 600 women to senior jobs at Lloyds by 2020, that is likely to attract the greatest attention.

Speaking exclusively to Sky News, Fiona Cannon, the bank's director of diversity and inclusion, said the initiative made sound business sense.

"One of our visions is to be the best bank for customers. As the largest UK bank we are located in communities across the country and our customers are incredibly diverse," she said.

"There is a whole body of research suggesting that where organisations have a diverse senior management team they are much more financially successful than those that do not."

The Lloyds executive said that a 40% target was stretching but achievable. 28% of the bank's top 5000 jobs are currently held by women, a spokesman said.

"Creating an organisation that is meritocratic is good for everyone, not just for women," Ms Cannon said.

Lloyds' pledge comes amid mixed results from a concerted push in recent years to get more women elevated to board positions, with advocates arguing that greater diversity improves the stewardship of major companies.

That argument has acquired more weight in the aftermath of the financial crisis, although empirical evidence backing the superior performance of boards populated by women remains patchy.

The Government has thrown its weight behind a voluntary campaign to ensure that 25% of the directorships of FTSE-100 companies are held by women by the end of next year and has threatened to impose formal quotas if the objective is not met.

Since the initiative was launched by the former Trade Minister, Lord Davies, the proportion of women on boards has grown from 12% to 20%.

However, amid additional pressure from Brussels for the introduction of legally-binding quotas, there are concerns that the pace of change has been insufficiently rapid.

Vince Cable, the Business Secretary, said he supported Lloyds' work and hoped it would become a template for other major businesses.

"We are not tapping into the talents of half the population. If we are going to get proper balanced representation in companies, it has got to start with senior executives, working up to chief executive level," he said.

Mr Cable has been a supporter of voluntary rather than mandatory targets for women on boards, saying there was little evidence that more female leadership of financial institutions would have averted the 2008 banking crisis.

"I don't buy into that stereotype one way or the other," he said.

"All the evidence we have suggests that companies which do make use of the female labour force do very well at the top end. We need to make sure that becomes standard practice in the UK."

Lloyds' plan to announce the gender target is understood to have been signed off by the bank's board on Friday, less than two weeks before it reports full-year results for 2013.

The company, which provoked a row with Mr Cable by axing more than 1000 jobs this week, is preparing for a return to full private sector ownership in the coming months.

Ms Cannon dismissed the idea that Lloyds' proposals could be labelled as a publicity stunt, although critics of gender targets have argued that they are tokenistic and risk promoting mediocrity at the expense of genuine talent.

Only four FTSE-100 companies - Burberry, easyJet, Imperial Tobacco and Royal Mail - have female bosses. Severn Trent, the water company, has also named a woman as its next chief executive, although Angela Ahrendts, the boss of Burberry, has resigned to take up a role with Apple.

Even fewer companies have a female chairman, with reform-minded businesspeople urging the pipeline of executives to be bolstered in order to facilitate future boardroom appointments.

Speaking to Sky News, Ruth Lea, an economist and director of Arbuthnot Banking Group, said doubts remained about the "gene pool" of available women to fill senior positions.

"I don't think positive discrimination is the best way forward for women. It breathes tokenism and suggests that somehow women cannot make it on their own merits," she said.

"It isn't a matter of discrimination. There simply isn't the gene pool of qualified and experienced women in comparison with the number of men. Men and women make different choices about their lifestyles and careers."

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