In the global push for gender equality, financial inclusion and leadership diversity, the entities of policy and culture share a reciprocal relationship. While cultural shifts may lead to transformative policy changes, policy also has the capacity to alter deep-seated societal norms. Nowhere is this dynamic more apparent than in the case of gender balance.
As was highlighted at OMFIF’s recent roundtable on gender equality and financial inclusion, closing the gender gap is not simply a matter of policy implementation – it’s also about fostering a cultural change that empowers women to participate equally in the workforce, particularly in leadership roles.
The role of policy in changing culture
Policy has the power to lead by example – by setting tangible targets and promoting visibility. A participant from Banca d’Italia highlighted how Italy’s 2011 gender quota law has contributed to a marked increase in female representation on boards, thereby breaking barriers to leadership positions for women. Policies like these set in motion the necessary cultural changes within organisations, promoting diversity as a business norm rather than an exception.
A similar law that mandates listed companies in member countries to have 40% of non-executive directors, or 33% of all directors be female, was adopted by the European Parliament in 2022. While OMFIF’s Gender Balance Index tracks gender parity in senior leadership levels across central banks, sovereign funds, public pension funds and commercial banks and not all listed companies, there is some early evidence of how the policy changes has had wider impact. European institutions in the index outperform the rest of the world across all institution groups (Figure 1).
This is most evident for sovereign funds, where the regional score for Europe is four times higher than that of the rest of the world. For central banks as well, the region has the highest aggregate score of 50, compared to 28 due to noticeable progress in central and eastern Europe. Four central banks appointed new female governors, out of the seven new female governors globally.
Figure 1. European institutions lead the wayÂ
Regional GBI scores, 2024
Source: OMFIF Gender Balance Index 2024
Cultural barriers to policy effectiveness
Despite the improvements effected by policy, cultural resistance can significantly hinder progress. A speaker from Banco de Portugal pointed out that at the central bank – which now boasts 52% women employees across the institution and a balanced board with three out of seven positions held by women – progress has been steady but remains uneven at the top levels. While mid-management roles are increasingly filled by women (54% at present), only 30% of senior leadership positions are held by women. This discrepancy points to the persistence of cultural factors that limit women’s access to the highest levels of leadership, despite strong policy interventions, such as unconscious biases, stereotyping and the organisational glass ceiling.
Participants from Banco de Portugal and Banca d’Italia both noted that women still tend to self-select into less competitive roles, often due to entrenched societal expectations. This was echoed by another participant from the private sector, who highlighted that maternity leave policies, while well-intentioned, can reinforce traditional gender roles by disproportionately affecting women’s careers. In contrast, paternity leave policies, which are still underutilised, offer a more effective way to challenge these norms. By encouraging men to take a more active role in caregiving, such policies can catalyse a cultural shift towards greater gender equality both at home and in the workplace.
The intersection of policy and culture was also evident in discussions on financial education. Financial literacy, especially among women, was identified as a key enabler of financial inclusion and leadership representation. Yet cultural factors, such as early exposure to financial education and household dynamics, play a crucial role in determining whether women will pursue leadership roles in finance. According to an Organisation of Economic Co-operation and Development survey, in Italy, the gender gap in financial literacy begins at an early age, with women consistently scoring lower than men in financial knowledge. Addressing this gap requires policies that promote financial education as well as a cultural shift that encourages women to take ownership of their financial futures.
Policy can change culture and culture can change policy
The interplay between policy and culture is apparent. Cultural shifts can inspire policy changes, just as policies can reshape societal norms. During the roundtable, participants mentioned how in countries where societal attitudes towards gender equality are progressively shifting, particularly in Europe, policies like gender quotas and financial inclusion initiatives have been embraced more readily. These policies, in turn, are reinforcing the shift towards greater gender equality.
However, the inverse is also true. Without a supportive culture, policies can fail to take root. Another participant at the roundtable shared research on gender diversity and credit ratings, noting that while there is a correlation between higher gender diversity on boards and improved ratings, this trend has not yet translated universally across all industries and regions. This suggests that policy alone is insufficient.
Ultimately, the discussion around gender balance cannot be framed solely as a debate between policy versus culture. Progress in one area often drives change in the other.
Looking ahead, policy-makers and institutions must continue to focus on both fronts. Policies that promote gender equality in leadership, paternity leave and financial education will remain essential tools. But equally important is fostering a culture that values diversity and challenges traditional gender roles. A combination of proactive policies and cultural evolution is required to close the gender gap.
Yara Aziz is Economist, Economic and Monetary Policy Institute at OMFIF.Â
