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Accountability and action: Improving senior female representation at Lloyd’s

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Yesterday, we published a detailed examination of the barriers preventing women from reaching the executive committees of Lloyd’s managing agencies.

The figures arising from our research are stark. Just 18 women occupy the position of CEO, managing director, CUO or CFO, and additionally are listed as an executive director, across all of Lloyd’s 55 managing agents.

Only one is a CEO – Lorraine Harfitt at Asta, who was appointed just this month.

It is worth noting that while there are women in the market which hold C-suite roles for business units, that role does not always translate to the same role on a Lloyd’s managing agency board, or in some cases, a place on the managing agency board at all. This is particularly the case at companies which run both Lloyd's and company market platforms.

The numbers highlight the lack of women in strategic, decision-making roles and on executive committees in Lloyd’s, even though the Corporation’s own culture dashboard shows improvement in female representation at senior level and throughout the market as a whole.  

In this follow-up, we explore the potential solutions to the dearth of senior women both at Lloyd’s managing agencies and more widely in the market, based again on extensive anonymous conversations with both male and female sources at every level of seniority across Lloyd’s.

It should be noted that this list is not exhaustive, nor does it provide a catch-all solution to what is a very complex picture. However, we have gathered together the most commonly proposed solutions in our canvass.

Key themes here include:

  • More stringent quotas or targets for women and people from ethnic minorities in senior positions

  • More widespread adoption of generous parental leave and other employee benefits

  • A collective push to create a more inclusive environment for women

  • Schemes designed to identify and train internal candidates for future leadership roles – such as shadow boards

  • Greater insistence from nominations committees on diverse hiring longlists

  • The importance of male sponsors or champions

  • Better collection and use of data, including monitoring not just entry-level intake but equality in promotion rounds

We would also flag that the 2022 Women in Finance Charter Blueprint, published by Aviva and Bain, has further statistics, best-in-class initiatives and successful case studies from across financial services which supplement this list.

Additionally, we will also be holding a free-to-attend Insider Progress webinar on 5 October to discuss this topic (you can register here).

Efforts so far

It would be remiss not to mention the efforts that the Corporation and many Lloyd’s managing agencies have made towards improving gender parity across the industry, and how these have improved both women’s representation across the market and specifically in leadership roles.

The 2022 Lloyd’s culture survey found that women make up 30% of leadership roles in the market, including boards, executive committees and direct reports to the executive committee, against a target of 35%.

Lloyd’s itself has set up a number of initiatives to improve the future pipeline of female leaders, as well as schemes to support and promote people from ethnic minorities and LGBTQ+ people.

These include Advance, a programme that aims to increase the number of women taking up senior roles in the industry; Accelerate, which pledges to do the same for people from ethnic minorities; and Lloyd’s Pride and the Allies pilot LGBTQ+ mentoring scheme.

It would also be unfair to tar all Lloyd’s businesses with the same brush – some have already exceeded female leadership targets, some have reached them, and some are behind.

However, many sources argued that more could and should be done collectively to improve the pipeline of female talent into the top jobs.

Targets

Controversially, a number of sources suggested setting firmer and more demanding targets for representation at senior level, both for female staff and those of ethnic minority backgrounds and members of the LGBTQ+ community.

Of course, targets for senior representation brings scope for management to be challenged over their dedication to meritocracy – but a number of sources said that without a form of goal, and incentives and/or penalties linked to that goal, inertia would prevail.

“We need to set more D&I targets [for higher level management],” one source said, stressing that this should not be at the expense of more qualified candidates.

“You have to hire the best person for the job, but if you have two equally qualified candidates, one male and one female, you should be hiring the woman.

“Companies that miss targets at this level should get a capital load [from Lloyd’s].”

Other sources agreed that given Lloyd’s recent intensified interest in improving D&I across the market, and its imposition of targets around gender parity in recent years, minimum thresholds seem likely if firms fail to change themselves.

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A female source with executive experience said: “I [would] hate it, as a woman, if I was chosen for being a woman but otherwise how do we get a market which is stuck in its ways to take risks?”

Other sources advocated for setting targets for diverse hiring within their own organisations, departments or teams – a brave move that will require senior management buy-in, as well as time and space for recruiting managers to search and consider options.

It was also suggested that senior management should have remuneration incentives for hitting diverse hiring or promotion targets.

I [would] hate it, as a woman, if I was chosen for being a woman, but otherwise how do we get a market which is stuck in its ways to take risks?

One source said that in a recent hiring process for a vacant position, they told recruiting staff that every person hired would need to bring some element of diversity to the team.

“I told my staff they could interview as many people as they liked but I would not be interviewing more than five [for the second round of interviews],” they said.

“I told them I would not find a shortlist of five white privately educated men acceptable.”

Ultimately, they filled the position with a black man from outside the industry, who they described as “unpolished” compared to white, private- and university-educated peers but who displayed more enthusiasm for the role and eagerness to learn.

Nomination committee scrutiny

A number of sources have highlighted the role of nominations committees in improving female leadership numbers, given their key decision-making roles around senior appointments.

Their interactions with executive search firms were a particular point, with several sources claiming that headhunters regularly fail to produce diverse longlists for top roles.

Most sources, however, turned this issue back on the hiring company itself – and said boards should take a tougher stance in their demands around executive search.

We need to stop saying it’s too difficult and just do it

“Firms should be strict about insisting on more diverse longlists,” one source said, while another added that some firms have recognised the problem and made a point of pushing to improve.

Another added that committees must insist on a 50/50 gender split on longlists when instructing executive recruiters.

“We need to stop saying it’s too difficult and just do it,” they added.

Sources said there needed to be more emphasis on looking further afield than insurance to recruit into C-suite roles – particularly in sectors which have better female representation at the top, including tech and legal.

Others noted that the value of returners programmes was vastly underestimated in insurance – as women returning from career breaks bring with them significant and existing expertise and skills.

A recent return-to-work programme for the London market run by Inclusivity Partners achieved a 92% retention rate for participating candidates.

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Boosting boardroom exposure

In yesterday’s piece we also explored the difficulty women have in gaining the experience perceived to be essential to progress to board level.

This is due not only to the career patterns women are more likely to have had, but also to haphazard succession planning at many firms, which often ends up with a decision to appoint the most familiar (and very likely male) face.

As a number of sources pointed out, replacing an outgoing CEO with a candidate who is very similar but 15 years younger, then, may end up doing little to futureproof a business – and does little to further female progression.

“Companies should have a CEO designate, whose job it is to learn the nuts and bolts of the role but also think about what that company needs in five years’ time,” one source suggested.

“If women took those roles, it would help them gain confidence and additional skills in the role before the succession.”

Companies should have a CEO designate, whose job it is to learn the nuts and bolts of the role but also think about what that company needs in five years’ time

Another source suggested that companies implement “shadow boards” to help a variety of candidates for future leadership learn the processes and behaviours of corporate decision-making bodies.

They explained that shadow boards could comprise talent from across a company, with a non-executive director acting as chair.

The shadow board would discuss an issue that the board itself is working on and report back to senior management with its view.

“We need to look further down the line and earmark people as future board members and then support them into it.”

Other sources suggested shadowing schemes for women and non-executive directors to improve their board experience.

Inclusion and sponsorship

A counterargument to the shadowing suggestion was that the solution should not be to “fix” women – and that those who currently occupy these spaces should instead actively be trying to make them more inclusive for women.

The need to create a more inclusive environment for women also extends further down the ranks, particularly around the networking events, which can often be geared to traditionally “male” activities.

Sources recognised there was no quick fix to the inclusion problem but said speaking out against sexist “microaggressions” was important for all members of the marketplace, and there needed to be more active consideration of how networking events could be made as inclusive as possible for all.

One common emphasis among women was the importance of male sponsors and allyship at all stages of a person’s career.

A number of senior female practitioners stressed that the times they saw he most rapid and fulfilling career progression was when they had a male sponsor or champion.

However, the availability of these initiatives is poor across all financial services, as the Women in Finance Charter Blueprint highlights.

Employee benefits and work/life balance

In our previous piece, sources said that a major barrier to women progressing within Lloyd’s businesses was child-rearing and other caring responsibilities, which still fall more heavily on women than on men.

This is a key contributing factor to the phenomenon of women exiting the workplace mid-career, often moving to roles outside of the market where there is better provision for mothers and people with other caring roles.

Some women also exit the market or struggle to progress around the time of menopause, understanding of which several sources said was poor within the market.

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The only way to counter this, sources said, is through better workplace benefits surrounding caring roles, menopause and a more progressive view of work-life balance.

“It's not that boards don’t want women with caring responsibilities,” a source said, “they don’t want anyone with caring responsibilities”.

“That’s a cultural thing and the question is why that doesn’t happen to the same extent in other financial services. For example, in law there are lots of female partners.”

In recent years parental benefits have vastly improved across the market, with many companies offering 12 months of leave, including six months paid, for all new parents of any gender.

This development – particularly as men begin to share the work of childcare and form new perspectives – has done much to improve women’s standing in the market, but sources said more must be done.

“Companies need to give women on maternity leave more opportunities to stay involved, for example through ‘keep in touch’ days, so they can pick up quicker on their return,” a source said.

More should also be done to encourage men to take up the benefits and to dispel negative perceptions around paternity leave.

Companies need to give women on maternity leave more opportunities to stay involved, for example through ‘keep in touch’ days, so they can pick up quicker on their return

The advent of widespread flexible working brought about by the Covid-19 pandemic has also helped to chip away at the market’s devotion to presenteeism and in turn benefit women with responsibilities outside the workplace.

Better data (and use thereof)

Companies that want to get to the bottom of the lack of female leadership and the reasons for slow or non-existent progression for women must also get better at collecting and analysing data around hiring and promotions, sources said.

Sources pointed out that better monitoring of the diversity of hiring and promoting is already a priority for Lloyd’s, as well as wider financial regulators.

It’s so easy to put a female non-executive director in, tick a box and pay lip service

However, they added that firms are guilty of meeting existing quotas to the letter, but not within the spirit of reform efforts.

“It’s so easy to put a female non-executive director in, tick a box and pay lip service,” one source said.

A legal source specialising in financial services employment noted that more firms are properly tracking the hiring and progression of female talent through their ranks than before.

They added that modern legislation allows for positive action to improve the standing of underrepresented groups, rather than only preventing active discrimination, clearing the way for more intense efforts.

However, they added that more could be done when it comes to data.

“This has to start at graduate/intake level and then look at each stage of promotion and whether that is fair and equal,” they said.