Lloyd's CEO John Neal warns of 'ultimate sanction' if firms do not meet gender targets

Lloyd’s has set an interim target of 35% female representation in leadership positions to be achieved by the end of 2023.

Speaking during the opening keynote at industry diversity and inclusion event Dive In, Neal said: “That means at board level, executive level and direct report to executives. In addition, boards and executive committees combined, must be expected to achieve at least 20% female representation by the end of 2023.”

The Lloyd’s boss added that the corporation will not wait “until 2023 to see if people have got there”.

He continued: “Ultimately, if people don’t get there, the ultimate sanction could be applied that they are not permitted to trade. You could take the most dramatic of action. In some instances, we might have to do that. If people refuse to play to our rules, they are the same as any other rules in that they are there for a good reason, we could make the ultimate sanction. The trick for us is to take people on a journey.

“That’s the reason for time. You can measure people’s progress through 2021, 2022, and 2023. If they’re not getting where you want, you can help them. That is what we are setting out to do. We are not accepting failure. We are trying to drive for success.”

Neal added that for businesses trying to set up in Lloyd’s now the inclusivity targets apply to them “from day one”.

He explained: “If you are starting a business today there should be parity. We aren’t giving you three years to work it out. We are giving people in a situation that requires change time to work it out. If you are starting today, get on with it and do it. All of us, we should be vocal about why we are doing it and why we are a better business as a result of the changes we are making. If you are starting a business today, those objectives we have set giving people a bit of time, you have to meet on day one.”

Neal continued: “There is undoubtedly a long way to go. And it takes every single one of us to really accelerate change. But we are absolutely determined that we can and will create a culture in the Lloyd’s market in which everyone can succeed, and everyone can flourish.”

Cultural survey

Neal reflected on the results of Lloyd’s 2019 market culture survey. At the time, Neal said he was “appalled” by the survey’s results, which showed 8% of workers claimed to have witnessed sexual harassment in the market.

Speaking this morning, Neal said: “The results in terms of female representation and the way women were feeling in our marketplace were beyond appalling. They were staggering.”

“This has to be fixed,” Neal said. 

He added that “the good news is you get data points [from the research].”

He continued: “I do not believe that culture is a decade on decade change.

“We are so much better for doing it. When it gets to representation for black colleagues and ethnic minority colleagues, we will be better for it, so we will tackle that issue with the same vigor and the same speed as we have on gender. Let’s keep the conversations going.

“I feel we are better for the changes we are making. Bring on the conversations. It is making a huge difference.”

Inclusivity Targets

Lloyd’s will look to set ethnicity targets “halfway through 2021,” Neal confirmed.

On the timing, Neal said: “There is no magic reason for that. It’s making sure we have the right data points to inform us so we set the right targets. We will monitor people through that period of time.

“This follows our five initial actions which were published in June this year, and which are intended to improve the experience of black and minority ethnic community across the marketplace. We’re investing in positive programmes to attract, retain, and develop black and minority ethnic talent in the Lloyd’s market, including launching our accelerate programme to develop ethnic minority future leaders across the market. We are reviewing our employee and partner practice policies, as well as our organisational artefacts to ensure that these are explicitly non racist.”

Covid-19

The pandemic offers an opportunity to rethink diversity and inclusion strategies, Neal suggested.

He said: “Covid-19 has given us all an opportunity to regroup and reconsider what we can do to build back better whether that be by reducing our environmental impacts, tackling inequality, or by creating a more inclusive society.

“We’re building back better at Lloyd’s, the work on building a more diverse and inclusive culture within the Lloyd’s marketplace was well underway when the pandemic struck. But we’re by no means finished. And we’ve got so much more to do. So we’ve taken this opportunity to challenge ourselves.”

Neal added that accelerating plans and making a positive change is “critical” following “the racial inequality movement that came to the fore following the tragic death of George Floyd and shone a much needed spotlight on the experience of black and minority ethnic colleagues.”

He continued: “Commitments are fine, but they must be backed up by taking meaningful and measurable actions to level the playing field.”