Glass ceiling still firmly in place for women in finance

Few steps forward but many steps back for gender parity

Last year saw historic highs for gender parity in senior leadership positions at financial institutions, but 2024 does not show the same promise. In February, Beth Hammack, co-head of the financing group who was seen as most likely to break the glass ceiling at Goldman Sachs, left the firm after 30 years. Earlier this year, after just eight months as governor of the Central Bank of Türkiye, Hafize Gaye Erkan stepped down from her post.

The dual departures, although for different reasons, reinforce how most women are unable to break through the glass ceiling despite their qualifications. The departure of Erkan could also be a symptom of the glass cliff, which is the notion that women are more likely to be appointed to leadership roles during periods of crisis, when the risk of failure is highest.

Hammack was once internally the top choice to become the next chief financial officer, despite having been passed over in 2021. Goldman Sachs has never had a female chair, chief executive officer, president or CFO in the company’s history. Of the 50 commercial banks assessed in OMFIF’s 2023 Gender Balance Index, the bank ranked 18th and its score has fallen further in 2024. But the lack of women in senior roles at banks, especially in revenue-generating positions, is not unique to Goldman Sachs.

Low representation at the top

OMFIF’s GBI 2023 report found that, in commercial banks, women make up just 19% of C-suite positions. More alarmingly, 27 commercial banks included in the index have no women in their C-suite at all. In an interview for the report, Samantha Saperstein, managing director and head of Women on the Move at JP Morgan Chase, noted that about 50% of JP Morgan Chase’s team are women, but there is less representation at the senior level.

While entry-level positions have moved closer to gender parity, senior leadership continues to be largely comprised of men. Other interviewees in the report identified caregiving and childcare responsibilities that women traditionally take on as the key barrier to progress.

Saperstein explained that ‘women don’t always get that first manager promotion as fast. For women with children, those caregiving responsibilities tend to impact their decisions to opt out of jobs with heavy travel and long work hours’. This parenthood effect also worsens the gender pay gap, as was highlighted in Claudia Goldin’s Nobel prize winning research.

The trend of gender balance worsening higher up the career ladder is visible across the institutions covered by the GBI (Figure 1). But there has been some progress over the years. The share of women across the top three tiers of leadership increased marginally from 2022 to 2023. It was only in 2023 that the share of women across all senior positions crossed 30%.

Figure 1. Long path to gender parity

Share of women in leadership positions, %

Source: OMFIF Gender Balance Index 2022-23

Interestingly, institutions with a higher proportion of women in leadership positions are often led by women themselves. Notable examples include the Central Bank of the Republic of North Macedonia where 70% of senior staff members are women, including Anita Angelovska-Bezhoska and two of three deputy governors, Emilija Nacevska and Ana Mitreska. This is similar for the Cayman Islands Monetary Authority, where 65% of the senior staff are women, including Governor Cindy Scotland and two deputy governors.

The Reserve Bank of Australia also had a higher share of women in its senior staff in 2023, and the balance has skewed towards women even more after Michele Bullock’s appointment as governor last year. There are 15 institutions in the GBI where the scales tips towards women, of which nine are female-led. While this suggests progress in certain contexts, financial institutions are far from balanced globally.

The next edition of the GBI, publishing in April, will further examine whether institutions led by women are more gender balanced than those led by men.

Appointing women to lead financial institutions is certainly not enough to improve gender balance. However, existing policies aimed at improving representation within financial institutions often focus on board-level diversity, overlooking the broader spectrum of leadership roles. As the disparity between the gender makeup of entry-level and senior positions widens, there is a growing recognition of the need to reassess these policies. Current approaches fall short in addressing the root causes of gender imbalance, necessitating a shift towards more comprehensive and inclusive policies across all types of financial institutions.

The case for diversity in financial institutions is unequivocal, supported by ample evidence and industry insights that more diverse leadership leads to better decision-making and higher returns. However, action to rectify longstanding disparities remains inadequate. As institutions grapple with the challenges posed by the glass ceiling and the glass cliff, it becomes increasingly imperative to implement effective policies and measures that promote gender parity across all levels of leadership.

Arunima Sharan is Senior Research Analyst, Economic and Monetary Policy Institute, OMFIF.

The 11th edition of OMFIF’s Gender Balance Index is publishing on 10 April.

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