Lloyds, a retail bank located in London, has set a goal of making sure that its senior staff is 40 percent female by 2020.
To get there, Antonio Horta Osorio, the bank’s CEO, will hire 600 more women as managers in that time frame. He also wants to ensure that at least 25 percent of managers at every level of seniority are women. The bank’s current workforce is 60 percent female, but women make up just 28 percent of its 5,000 person senior staff. The increase will bring senior women’s numbers up from 1,400 to 2,000.
Lloyds’s voluntary effort may be in reaction to the many different studies that show increased diversity produces better results. Companies whose boards are at least a third female make an average of 42 percent more profit that those with fewer women, and shareholders receive 53 percent higher returns. Increasing women’s representation on boards has been found to increase stock price and performance and to protect shareholder value. The bank may also see another benefit from its push for diversity: increasing women’s representation has also been found to lead to even greater diversity later on.
The pledge comes amid efforts in the country to increase women’s representation at the top. In 2011, a government report set a target for the top 100 companies listed on the country’s stock exchange to ensure that 25 percent of their board seats were held by women by the end of 2015. Since then, their percentage of women reached the highest level since the data was first analyzed, climbing to 19 percent. That marks a five percentage point increase since 2011, similar to the growth that took place over an entire decade before.
But while it has made progress on boards, the country has seen less progress in increasing diversity among top executives. The share of senior executives that are women has stayed at about 6 percent since 2010. The country’s target for boards hasn’t been replicated for executives, although lawmakers have called on companies to publish details about gender diversity among the top ranks.
Most countries that have requirements about gender diversity also focus on the boardroom, but Japan stands out. As part of his push to get more women into the country’s workforce and boost its economy, Prime Minister Shinzo Abe has announced a goal of increasing women’s representation among executives to more than 30 percent by 2020. It may sound like a low goal, but currently women make up just 1.6 percent.
At least seven European countries, on the other hand, have instituted actual quotas for women on boards, although not for female executives. After Norway instituted its rule, its boards are 35 percent female and its executive suites are 18 percent female.
The United States hasn’t tried any of these efforts to increase diversity. The only rules simply require companies to disclose information about how they take diversity into account broadly, although most skirt them anyway. Women hold less than 17 percent of board seats at the countries largest companies, a number that hasn’t budged in eight years, and less than 15 percent of executive positions, which hasn’t increased in four.