Less than 1% of global financial institutions achieved gender balance in 2021 according to the eighth edition of OMFIF’s Gender Balance Index, launched on 8 March.
Top financial policy-makers and business leaders offered solutions for addressing this imbalance during a series of public discussions held to mark the launch of the report. This year, in addition to the public sector, the GBI included financial institutions from the private sector for the first time.
To commemorate International Women’s Day, OMFIF held a fireside chat with 100 Women in Finance and convened a panel in partnership with EDGE Certified Foundation. Speakers brought a wide range of experience and perspectives from both sectors to the gender balance debate.
Margarita Delgado, deputy governor of the Bank of Spain, which ranked fourth in this year’s rating for central banks, highlighted three practices that could improve gender balance in the financial sector: creating a talent pool of women within institutions, establishing an internal narrative to raise awareness and build an inclusive environment and introducing measures aimed at empowering women.
Aniela Unguresan co-founded EDGE Certified Foundation, an organisation that measures and certifies gender equality in the workforce. At the GBI launch, she said that private sector institutions have the power to inform and change policies in the public sector and help modify cultural perceptions through corporate policies.
Unguresan highlighted a shift in in investors’ attitudes towards an ‘increased level of attention on how shareholder value is produced […] and the values that underpin the shareholder value creation’. She noted that this has led to the creation of an expanded definition of ‘organisational success’ that embeds sustainability, innovation, agility, resilience, dignity and gender balance and inclusion at its core.
There were conflicting views over the use of quotas to achieve gender balance. Chen Fangfang, Asia Pacific chairman and head of Asset Servicing and Digital, BNY Mellon, described quotas as significant in driving diversity in an organisation’s culture. She pointed out that ‘we all have blind spots. Unless you change the dynamic at the top, you can never institute a truly inclusive workplace… The tone from the top is so crucial to drive cultural change.’
On the other hand, Tom Barkin, president of the Federal Reserve Bank of Richmond, which was the only central bank to achieve gender balance in this year’s survey, warned that ‘When people get a job and other people think they got the job for the wrong reasons, it demotivates the people that are not in the quota.’
Research has shown that Covid-19 has had a disproportionate impact on women, who are more likely to lose their jobs due to the pandemic. This disproportionate impact is a structural problem, Unguresan explained. Women hold a greater percentage of lower paid jobs and jobs in the informal sector, both of which were hit hard by the pandemic. As Santander Chairman Ana Botín notes in the foreword to the report, women are more likely to take on additional unpaid care duties, which means that more women are being forced to leave the workforce or ‘downshift’ their careers.
The pandemic has heightened the need for remote working arrangements. However, this was seen as a double-edged sword by our panellists. ‘Remote working is a mixed blessing.’ Delgado said, adding that flexible working arrangements may have resulted in unintended consequences. In some instances, gender stigmas have been reinforced, such as imposing extra care responsibilities on women. This might worsen if women continue to work from home once the pandemic is over.
Barkin warned that staff members ‘might have a very legitimate interest in [working] more remotely but that may or may not be the best thing for their career’. He pointed to research suggesting that trust and collaboration is stronger in person, and institutional loyalty and mentorship function well only when personal relationships are built, which is harder to achieve online.
However, in the face of great uncertainty, the pandemic has shown the critical role of diversity in decision-making. Kathy Matsui, former vice chair at Goldman Sachs Japan. explained that, as a result of their critical thinking, compassion, communication and creativity, women ‘are perhaps better prepared or equipped with this new [digital] age we are entering in very quickly’.
Delgado pointed out that many studies have shown that organisations benefit from female leaders and that the pandemic has provided an opportunity to showcase this. British High Commissioner Kara Owen underlined the importance of role models in ‘bringing about the change we want to see for women and girls everywhere’.
Chen, Matsui and Yumiko Murakami, head of the Organisation for Economic Co-operation and Development’s Tokyo Center, highlighted the importance of women being ‘visible’, ‘different’ and ‘understand[ing] what your competitive advantage is’. In her closing remarks, Matsui implored: ‘Don’t be afraid to educate, it’s not politics and self-promotion, it’s educating others about your capabilities’.
Murakami noted that social and economic inclusion will be vitally important in building our economies back up. The results of OMFIF’s eighth GBI report are clear: progress has been made, but there is far more that needs to be done to address gender balance in the financial sector.
Natalia Ospina is Research Assistant and Levine Thio is Research and Programmes, Asia Pacific, OMFIF.