Men’s dominance at the top of central banks and financial institutions is unlikely to change any time soon. OMFIF’s Gender Balance Index 2023 finds that, at the current rate of progress, it will take 140 years to achieve parity between men and women in leadership positions in the industry.
The GBI, now in its 10th edition, tracks the presence of women and men in senior positions in central banks, commercial banks, pension funds and sovereign funds. Across the sample of 336 institutions, 14.0% are led by women. That’s up from 13.7% in 2022 and 13.3% in 2021. Taking a longer view paints a similar picture of slow progress. When we first released the GBI in 2014, 21 of the world’s central banks had a female governor. Now that number is 22 (Figure 1).
Figure 1. Record number of female governors but only one higher than in 2014
Number of female central bank governors
Source: OMFIF analysis
Note: Data includes presidents of regional Federal Reserve banks and the European Central Bank
Female representation is better lower down the ladder. Women make up 24% of deputy governors and C-suite staff, and 30% of the 6,221 senior staff across all institutions in the GBI. OMFIF’s analysis digs deeper to consider the types of roles held by senior women. This offers less encouragement. We find that 62% of female executives in commercial banks, pension funds and sovereign funds hold revenue-generating roles. That compares to 83% of their male peers. Essentially, men are much more likely to run a major business division from which future leaders in the financial industry will probably emerge.
The GBI encompasses these key data points into a single metric of gender balance for individual institutions. We take the share of women and men in senior management or board positions, with greater value given to higher ranks such as governor or chief executive. A score of 100 means an organisation has achieved perfect 50-50 gender balance.
The 2023 GBI scores reinforce the message of slow-going progress. All institutions groups advanced their GBI scores in the past year by 1-2 points (Figure 2). Pension funds continue to outperform with an aggregate GBI score of 50 out of 100 – meaning they are just halfway to achieving gender parity. The global score for commercial banks and central banks is less than 40, and only 23 for sovereign funds.
Figure 2. Improvement in gender balance across all institutions
Aggregate GBI scores (100 = perfect gender balance)
Source: OMFIF GBI 2018-2023
Note: Commercial banks were included in the index from 2021 onwards. The sample of pension and sovereign funds included in the index changed in 2022 to cover 50 of the largest institutions by AUM.
The GBI goes further to explore the barriers women face and possible strategies for improving gender equality. For the 2023 report we surveyed 46 central banks on their gender-related human resources practices. There was no direct causality between various policies and a better GBI score. But it was notable that central banks with worse GBI scores now than in 2018 were far less likely to have dedicated resources to gender balance, mentorship programmes or policies to ensure equal pay.
Interviews with six financial industry experts all revealed the ‘childcare tax’ as a major hurdle to women’s progress. Cultural biases were mentioned too, suggesting that the key to success is less tangible – perhaps it as much about attitudes as anything, in an institution as well as in the country or society in which it operates. The presence of female leaders can create a ‘ripple effect’ leading to ’more representation and gender balance elsewhere in the firm,’ according to Heather Mae Kipnis, acting co-manager and global product lead, gender and economic inclusion from the International Finance Corporation. This underscores the importance of change at the top.
It will be refreshing when a woman being in charge is seen as nothing remotely unusual. Only then will the culture of central banking and financial services feel truly balanced. One thing is for sure – we’d love to see this point achieved considerably earlier than the date of 2163 (140 years from now) that our report predicts!
Nikhil Sanghani is Managing Director of Research at OMFIF.