Written By: Jan Lee 12/8/15
British banking is in for a change.
Lloyds Banking Group is known in the U.K. for its support for gender and ethnic diversity. Itssponsorship of the Breakthrough Network and Women of the Future Ambassadors Program have helped to set the bar when comes to increasing diversity in the British financial sector.
But last month the banking group took its commitment to women’s rights a step further: It banned all-male management shortlists.
According to the Wall Street Journal’s blog, Moneybeat, Lloyds issued a directive to its outsource recruitment contractor, Resource Solutions, that “a minimum of one-third of your total submissions must be made up of suitably qualified female candidates.” The change affects all lists of applicants for positions of assistant vice-president and above, and it takes place immediately.
According to 2014 data shared by the banking group, only 23 percent of its board members are women. The percentage of female senior managers is only a few points better, at 29 percent. To counter that statistic, Lloyd vowed last year to increase the proportion of women in its 8,000 management positions. Its goal is 40 percent by 2020 and 31 percent by the end of this year.
Moneybeat and U.K. lawyers point out that giving preferential treatment to female candidates in order to reduce the inequity in ranks may bring employers “into uncharted territory” when it comes to employment laws. The employer would be expected to be able to show that all candidates had equal qualifications for the job.
But Arpita Dutt, a partner at the legal firm Brahams Dutt Badrick French LLP, said the new requirement was legal under British law if the move was meant to correct a shortfall that came from under-representation.
“Lloyds may well have identified that a cause of the disadvantage arises at the initial shortlisting stage,” Dutt said.
Lloyds is also not the only corporation in the U.K. financial sector to take steps to increase gender diversity in its business. According to one recruiter, some private equity firms had actually resorted to women-only shortlists, a practice that is illegal under U.K. law. Only 19 percent of investment banking positions and 21 percent of asset management jobs are held by women in the U.K. Some equity firms have yet to introduce gender diversity to their upper-level investment teams.
Still, it’s clear that the concept of gender diversity is still a new — and somewhat unsettling — idea in the British Isles. Last year the Telegraph’s deputy editor, Louisa Peacock, expressed concerns that gender diversity might become the scapegoat for the failure of an iconic British institution if it ran into financial trouble, some five years after the corporation’s massive bailout.
“I just hope female bankers won’t be blamed if Lloyds goes belly up,” she wrote. It’s a fear that today seems unreasonable here in North America, but is still a sign of the changing perspectives toward gender diversity.