Making Financial Markets Work for Women by Making Working in the International Finance and Banking Sector Work for Women
Contribution to UN Women E-Discussion Make Financial Markets Work for Women
The International Finance Corporation and other Bretton Woods institutions have made a point of researching and designing programs to improve women's access to banking and financial services as part of a set of initiatives related to the Women's Economic Empowerment movement in international policy circles. Examples of the work being done by the IFC and other Bretton Woods institutions can be found on the website of the IFC's Gender Secretariat, where research studies focus on how to better incorporate women in the working world as entrepreneurs and employees and the benefits of better inclusion of women in the business sector.
Despite the ascension of Christine Lagarde to the role of Managing Director of the International Monetary Fund and that of Janet Yellen to the role of Chair of the United States Federal Reserve, there appears to be inadequate comparative research about the role women can play as managers, executives and directors of the international and national finance and banking sectors, not just employees and consumers of banking products. The International Labor Organization, the IFC and World Bank should work together to gather the quantitative and qualitative information about ascension of women to board and upper level executive positions in the world's banks, especially in nations important to the international finance and banking sector such as the United States, Brazil, India, Singapore, Switzerland, Luxembourg and the United Kingdom - to name a few. It is not enough that international and national policy makers consider how to make banking accessible to women. They should consider that sharing control of the globe's purse strings is a critical component in women's economic empowerment.
One set of tools utilized by many nations to address access of women to management, executive and leadership roles in the private and public sector are those in the field of employment equity (Canada), positive action (European nations and the EU), affirmative action (United States, India, South Africa and Brazil) and quotas (Norway and India). For example, in Canada, the banking sector is regulated at the federal level, so all banks that operate in Canada are subject to that nation's federal Employment Equity Act and are required to submit periodic reports on achievements and challenges in employment equity. Scotiabank's Employment Equity Report to Canadian officials for 2012 reported that while 66% of Scotiabank's employees are women and half of its professionals are women, only about one third of Scotiabank's senior managers are women (Scotiabank, 2012 Employment Equity Narrative Report, Toronto, Ontario, p. 4). The report shows improvement since 2008 when only 24% of Scotiabank's senior managers were women, but acknowledges that improvements must still be made. In other countries, like Brazil, more sound, publicly available research and information is needed about women's participation in executive and management positions in the Brazilian banking sector. A 2009 study published by the Amsterdam Institute for Advanced Labor Studies (AIAS) indicates that women constitute 36% of that nation's legislators, senior officials and managers (Maarten, et al., An overview of women's work and employment in Brazil, AIAS, Amsterdam 2009, p. 50.). While this study provides an overview of participation of women throughout the Brazilian economy, it does not separate information about the private and public sectors and does not provide detailed information about women's participation in upper level positions in the banking and finance sectors in Brazil.
In 2011, Rohini Pande and Deanna Ford produced an intriguing background paper entitled Gender Quotas and Female Leadership as part of the 2012 World Development Report on Gender Equality and Development (2011 Pande & Ford Gender Quotas). Pande and Ford found that while career paths have broadened for women around the world, there has not been a proportionate increase in female leaders. They also found that gender quotas in Norway's legislative branch have led to more female legislators and more legislative attention to issues that are important to women. More research would have to be done, but it would be a productive task for the IFC and its Bretton Woods brethren to explore whether an increase of women in directorships on the boards of finance companies and banks would have a similarly positive effect on policies that afford greater access to banking and financial services for women. While it is a common stereotype that women tend to be less corrupt than men in leadership positions, Pande and Ford cite studies providing evidence that women have been less corrupt than men in the administration of local governments in India (p. 20). They also note that the lack of a female presence on company boards results partially from the lack of a female presence among top executives in companies. While Pande and Ford discussed companies in general, the ILO, IFC and World Bank could initiate research on whether this is also the case in particular in the banking and financial services sectors and, more importantly, what can be done about it.
Literature on the gender gap in leadership and management of the banking and financial sectors in the United States and United Kingdom tends to focus on the small number of women in leadership roles and obstacles to women's advancement. For example, Catalyst found that in 2012, 23% of senior officers in finance and banking companies and that 18% of board directors in the US were women, although 40% of all banking and finance employees were women (Catalyst, Women in Financial Services). The Institute of Leadership & Management in the United Kingdom found that women encounter a number of obstacles to progressing to leadership roles in the banking industry in the UK (Institute of Leadership & Management, Women in Banking). These obstacles include discrimination in promotion, ineffective performance management systems that make who you know rather than what you can do important factors in advancement, lack of female role models, inflexible workplaces and the need for a strong presence of women on the boards of directors of companies in the banking and finance sectors.
In contrast to the banking sectors in New York and London, which were the epicenters of the global financial crash in 2008, India's banking sector emerged relatively intact. Aman Dhall and Ravi Teja Sharma of The Times of India attribute better management of India's banks to the presence of a higher number of women in top executive and board positions (Dhall, Aman & Ravi Teja Sharma, "What makes women successful in the Indian banking industry," The Times of India, September 19, 2010, ). Dhall and Shama point to the hiring of promising female business school graduates by international banks entering the Indian market in the 1980s and 1990s. Many of these women advanced to top executive and board-level roles. According to the article, in present day India, three out of the top eleven bank executives in India are women. Bankers attribute the success of women bank managers in India to affirmative action policies, an emphasis on human resources policies that benefit all employees and family support. The article indicates that many of the women who advanced to top positions in India's banking sector have paid help at home, making the reader wonder if there may be financial barriers to ascension in bank management.
While the global literature on women's participation at executive and board levels in the banking and finance sectors is incomplete and requires additional attention, it is clear that women do not participate at top levels in proportion to their participation as bank employees and customers. Existing literature points to a path ahead for research focused in particular on women in management and executive roles in the banking and finance sectors. More research must be done to identify the reasons for successful results in some countries like India and inadequate progress in other countries like the United States and the United Kingdom. It is not just a matter of affording women more power to control the purse strings in the global banking and finance sectors. As the biography of Liberian President Ellen Sirleaf Johnson shows, leadership in the banking and finance sectors can translate directly into leadership in the political arena, and vice versa. When she was not jailed for her political activism in Liberia, President Sirleaf Johnson spent much of her life in exile in top level positions at the World Bank and as Director of Citibank in Kenya. One factor in her success as President and as a crusader against corruption who renegotiated a number of unfair contracts entered on behalf of Liberia by her predecessors may have been her extensive experience in the global finance sector.