Driving diversity GENDER BALANCE INDEX 2020

CONTENTS

3 Lifting barriers to women’s economic 20 IN CONVERSATION empowerment Foreword by Catherine Colonna With Margarita Delgado, Deputy 4 Taking public responsibility Governor, Foreword by John Orchard Banco de España 5 Market failure needs policy solutions Executive summary

CENTRAL BANK FINDINGS 6 Slow progress

THE 2020 SURVEY PART 1 THE 2020 SURVEY PART 2 10 A practical guide to diversity 22 Finding 5: Pushing parental leave Survey introduction 23 Improvement through measurement 12 Finding 1: No fast way to the top Irene Espinosa Cantellano 13 Real-world engagement 24 Finding 6: Flexibility for families Carolyn Wilkins 25 Modern family 14 Finding 2: A case for quotas Danielle Anev Janse and Kalin Anev Janse 15 The path-breakers’ duty 26 What corporations can do Fernanda Nechio Laurence Karagulian, Pauline Pélissier and Cécile Kossoff 16 Finding 3: Imperfect competition 27 Network effects 17 Category error Sarah Munday Rhonda Vonshay Sharpe 18 Finding 4: A safe and inclusive SOVEREIGN FUND FINDINGS environment 28 Funds fail to diversify 19 Championing women’s voices Chuchi Fonacier 30 Dismantling an old bias with new rules Isabelle Bébéar

...... 31 Harnessing investor power

home ...... Tamara Singh sweet home PENSION FUND FINDINGS ...... 32 Pensions show promise 34 The key to a healthy bottom line Debby Blakey 35 The other pay gap Eve Read

IN PARTNERSHIP WITH FOREWORD OMFIF.ORG 3

Lifting barriers to women’s economic empowerment

CATHERINE COLONNA,Ambassador of France to the United Kingdom

DESPITE encouraging language and awareness-raising, gender equality remains a challenging goal for policy-makers and businesses. French President Emmanuel Macron has made the fight against gender discrimination one of the pillars of his mandate and given gender equality the status of ‘national cause’. There is a long way to go to remove the cultural, economic, social and psychological barriers to women’s economic and professional empowerment. In France, although a law on professional equality was adopted 45 years ago, there is still a gender pay gap. It is, however, shrinking. On average, women in similar jobs to men earn 9% less, of financial decisions on gender ‘ Women’s and 25% less over the course of their equality will have to be assessed. It is empowerment careers. In 2018, firms were given important to promote concrete actions at all levels of three years to close this gap. They with positive results. An ‘equality’ responsibility, are monitored closely to ensure they label has been launched to reward in every fi eld, complied with this new obligation. public organisations, ministries and should be French law requires 40% of boards to councils which have taken concrete regarded as an be made up of women. All companies actions to address the gender pay achievement.’ comply with this obligation, and at gap. Rather than further evidence of 14 firms listed on the CAC 40, at least France’s appetite for legal texts and 50% of directors are women. However, bureaucratic procedures, these new few are appointed to executive legislative requirements are an effort functions. to drive cultural change. The design and budgeting of public Women’s empowerment at all levels policies must take gender issues of responsibility, in every field, should into account. France’s 2020 budget be regarded as an achievement. It can dedicates €1bn to gender equality. contribute to society’s development, There are plans to put in place gender and to a fairer economic, financial and budgeting, whereby the impact social environment worldwide. ◆ 4 FOREWORD GENDER BALANCE INDEX 2020

Taking public responsibility

JOHN ORCHARD, Chief Executive Officer, OMFIF

THE state regulates the labour market, but also dominates it as an employer in most countries. Regulation can only do so much to change behaviour; culture is more effective, though of course the two interact. As regulator and employer, the state has the privilege and responsibility to influence both. Public institutions such as central banks, sovereign funds and public pension funds have a particularly important role to lead by example. They interact heavily with the private sector, including financial services, which they supervise and are notoriously unequal at the expense of female employees. Central bankers operate increasingly in the public eye, and hold real economic power. They should strive to do better. OMFIF’s seventh Gender Balance Index takes stock of the progress thoughtful management of selection ‘Morality being made in these critical public processes. They restate over and again aside, the institutions, whom we polled directly. that, morality aside, the empirical case empirical case Our summary finding is this: slow, for diversity as a driver for performance for diversity in the right direction. The European is unanswerable. The OMFIF research as a driver for Central Bank may now have a female team would hope to measure further performance is president, but one in five central banks progress next year, perhaps with more unanswerable.’ has no women in senior positions. While velocity. ◆ the Kuwait Investment Authority is now chaired by a woman, our index score for sovereign funds in North America, the best-performing region, has gone backwards. In addition to these important – and mixed – trends, we review the framework of policies and practices that enable better participation of women in the workforce. Our contributors reveal a wide and heartening range of effective tools already deployed to do this, from better facilitation of flexible working, to more INTRODUCTION/EXECUTIVE SUMMARY OMFIF.ORG 5

Market failure This report fi nds that: GENDER balance in central banks has improved for needs policy the second year in a row, but the global score remains disappointing at 27.5 (a score of 100 means perfect solutions balance). SPAIN tops this year’s index with a score of 92, LACK of gender diversity in fi nancial institutions followed by Aruba, Iceland and Malaysia. is a persistent problem, but things will not change without modern, progressive policies. Action is ASIA PACIFIC’s score improved the most for central needed to correct opportunity asymmetries and banks, moving up to 12.3 from 9 last year. Europe level the playing fi eld, and create more inclusive remains the best-performing region with a score of and supportive work environments for women who 37.3. have been historically underrepresented in fi nance and economics. OUT of 173 central banks, 78 saw an improvement in The OMFIF Gender Balance Index tracks the their score, suggesting that more women are being presence of men and women in decision-making promoted to executive roles or appointed to boards. positions in central banks, sovereign funds and public pension funds. Each year, we report on how STILL, one in fi ve central banks has no women in these institutions are performing when it comes to senior positions. gender balance, highlighting notable appointments and changes in leadership that impact the index. BALANCE is worse at higher levels of seniority. Only This year, we go a step further. We present 14 central banks are headed by women. fi ndings from a survey of 46 institutions consisting of 44 central banks and two multilateral A quarter of respondents have a policy of shortlisting organisations with functions related to fi nancial candidates of both genders for vacancies in senior stability. The fi rst global study of its kind, this management positions. More than half (54%) of central investigates what measures they have in place banks have implemented a gender diversity programme to help correct gender imbalance and promote that encourages the upward progression of women. diversity and inclusion. We explore their selection For some respondents, this includes mentorship and processes, mentorship programmes and support leadership trainings specifi cally for women. for progression. We also look at their policies on harassment, maternity and paternity leave, and DIVERSITY is important in decision-making, but only childcare. We have consolidated best practices that 15% of central banks reserve seats for women on their other fi nancial institutions can learn from. board of directors or monetary policy boards. The report features insightful contributions from policy-makers and practitioners from central ALL respondents have some form of maternity leave in banking, public investment institutions and the place, with 35% going above and beyond the minimum private sector. They give perspective on how legal requirement. The majority of respondents (63%) diversity benefi ts their organisation and what o er between three to six months of paid leave. Almost practices can be adopted to pursue gender balance, all respondents have a paternity policy in place, but and share insights from their own career journeys. nearly half (41%) grant only one to two weeks of leave.

SOVEREIGN funds’ management and boards remain Methodology very imbalanced, although they show improvement similar to central banks. The overall score increased The OMFIF Gender Balance Index scores institutions based on gender balance among senior sta , weighted marginally to 19.5. Only eight out of 72 funds are by seniority. Governors and chief executives are headed by women, unchanged from last year. North given the highest weights. Members of executive America is the best-performing region, but lowest- teams receive higher weights than those in non- scoring Middle East made the biggest leap. executive roles, such as members of monetary policy committees. The score for each institution is calculated by EUROPEAN public pension funds perform the best taking the ratio of the female and male components. and improved the most among the three institution Global and regional scores for central banks are types. The overall score increased 12% to 46.3 from weighted by corresponding countries’ GDP. The country, regional and global GBI score for pension 41.3 the previous year. The number of female-led funds funds and sovereign funds are weighted by the value rose to 36 from 31. Nordic countries did well, with of these institutions’ assets under management. Iceland and Norway topping the list. 6 CENTRAL BANK FINDINGS

+11 % Global score rises to 27.5 from 24.8 Slow progress Central banks’ global score improves for the second year in a row, but gender balance is still a long way off, with no women in senior positions at one in five institutions.

DIVERSITY in governance can bring various benefits. Some are obvious, direct and immediate. It helps ensure Gender Balance Index score, top 20 central banks 2020 that a range of views informs decision- making and risk-management when Rank Score GDP $bn formulating policy. Others can take longer to materialise. The inclusion of 1 SPAIN 92 ▲ 1,539.53 previously underrepresented groups ▲ in leadership can inspire others to 2 ARUBA 91 2.58 progress, encouraging competition. 3 ICELAND 90 ▼ 18.42 Diversity in the existing workforce can help expand the talent pool, 4 MALAYSIA 89 ▲ 382.13 encouraging people from minority 5 RWANDA 88 10.14 groups to apply for positions they may not otherwise have considered. For 6 LESOTHO 85 ▲ 2.98 public sector institutions like central banks, this is particularly important in 7 CAYMAN ▲ the light of their social duty to resemble ISLANDS 84 4.84 the society they serve. 8 SERBIA 82 ▲ 48.08 Encouragingly, our Gender Balance Index for central banks improves for 8 BULGARIA 82 60.77 the second year in a row, rising to 27.5 ▲ from 24.8. This value represents the 10 SAMOA 81 0.74 aggregate performance of individual 10 TRINIDAD institutions, whose scores are weighted AND TOBAGO 81 ▲ 21.07 against the corresponding economy’s share of global GDP. A score of 100 12 BELIZE 79 ▲ 1.63 would represent perfect balance. 13 NAMIBIA 77 ▲ 14.80 There is weak correlation between the size of an economy and its performance 14 CUBA 76 ▲ 77.29 on the GBI when looking at the world’s ▲ largest economies. Among the 10 14 SAN MARINO 74 1.63 biggest, scores vary from a range of 30- 16 TUNISIA 73 ▼ 50.90 50 for the US, France, Germany, UK and Canada, to below 3 for China and Japan. 17 SEYCHELLES 69 ▼ 1.39 The top scorers are a mix of small and 18 ESWATINI 69 ▲ 5.42 large economies. Spain tops this year’s index with a score of 92, followed by 19 ALBANIA 67 ▼ 14.56 Aruba and Iceland, both scoring above 90. Spain and Aruba are two of only 12 19 NORWAY 67 ▲ 489.33 central banks to have a positive female bias, missing out on a perfectly balanced Source: OMFIF analysis, World Bank score because of an overrepresentation of women in top positions. GENDER BALANCE INDEX 2020 OMFIF.ORG 7

One in five central banks has no woman, unchanged from last year. They Europe maintains top score, Africa women in senior positions represent less than 30% of the global and Asia see big improvements GBI research is based on publicly economy (4% if the European Central Out of 173 central banks, 78 see an available information on the gender Bank is excluded). Chrystalla Georghadji improvement in their scores (14 of which of 2,501 individuals across 173 was the only woman in charge of a scored 0 last year). The scores of 44 institutions. They are the people at euro area central bank before stepping central banks remain unchanged, while the very top levels: governors, deputy down in April 2019. She was replaced by those of 51 banks declined. governors, members of monetary policy Constantinos Herodotou, a man. Later Asia Pacific’s regional score improves setting committees and executive that year, Christine Lagarde took the the most to 12.3, up from 9 last year and board directors. The exact composition helm of the ECB, bringing the total back 6 in 2018. Declines in Australia (to 55 and methodology of inclusion vary on to 14. However, this had no impact on from 79) and New Zealand (to 26 from the specific institutional make-up of the overall score, as the ECB is excluded 50) are more than offset by substantial each central bank, but on average we from the calculation of the global total. look at around 10 to 15 individuals per Instead, the overall improvement in institution. this year’s GBI score reflects mostly the Worryingly, one in five central progression of women within senior Central banks gender banks still have no women at this positions in central banks, as well as the balance index score level of seniority. This is particularly appointment of more women to deputy by region, 2018 v 2019 v 2020. a challenge for central banks in Asia governor positions. Isabel Schnabel Region scores (weighted by GDP) Pacific and the Middle East. Out of 35 joined the ECB’s executive board, Fundi central banks that have no women in Tshazibana became deputy governor of senior positions, nine are from Asia the South African Reserve Bank, and EUROPE* ▼ Pacific and nine from the Middle East. Fernanda Nechio was appointed deputy 2020: 37 For the Middle East this represents governor of the Banco Central do Brasil. 2019: 38 more than half of the region’s central Other central banks that appointed 2018: 35 banks. Seven are from Europe, including women to deputy governor positions ▼ two from the euro area (Belgium and over the past year include Estonia, NORTH AMERICA Slovakia), and five each are from Africa Liberia, Lithuania and Eswatini. This 2020: 35 and Latin America Caribbean. This raised the number of central banks with 2019: 36 represents the bottom of the pyramid, at least one woman at deputy governor 2018: 24 and balance tends to get even worse at position to 61 (from 56 last year), while AFRICA ▲ yet higher levels of seniority. the number of female deputy governors Only 14 institutions are headed by a globally rose to 75 (from 68 previously). 2020: 23 2019: 21 2018: 19

LATIN AMERICA CARIBBEAN ▲

2020: 23 Central banks with percentage of female... 2019: 19 2018: 11

ASIA PACIFIC ▲

2020: 12 2019: 9 2018: 6 80% MIDDLE EAST ▼ Presence overall 38% 2020: 7 Governor 2019: 10 or deputy 35% 2018: 11 governor Deputy governors GLOBA L* ▲

2020: 27 2019: 25 8% 2018: 19 Governors *Calculation excludes the ECB

Source: OMFIF analysis Source: OMFIF analysis 8 CENTRAL BANK FINDINGS

improvements in Korea and India, as well as in Indonesia and Malaysia. Female central Women on top Latin America Caribbean also bank governors The premise of this research, now in its improves its score, to 23.1 from 19. The by length of service seventh year, has always been to focus region is home to six of the world’s on senior levels because what happens at Cindy Scotland 20 best performing scorers. Island Managing Director, Cayman Islands the top matters. Women in visible, senior economies in the Caribbean perform Monetary Authority positions can serve as role models, particularly well. Africa scores only (since June 2002) demonstrating that successful careers marginally better than Latin America, are possible in traditionally male- with 23.3. Eleven of the top 20 most Jeanette Semeleer dominated institutions. Attracting more RigorousGovernor, Central studies Bank of Aruba and improved central banks this year are to the field also enables organisations to equality(Sept initiatives 2008) from Africa: Mozambique, Sierra Leone, benefit from a wider pool from which to needed Swaziland, Ivory Coast, Senegal, Mali, Maiava Ainuu-Enari hire, regardless of gender. Burkina Faso, Benin, Niger, Togo and Governor, Central Bank In that respect, 2019 was a landmark Guinea-Bissau all more than double of Samoa (Aug 2011) year. Christine Lagarde’s nomination their score. Half of the 14 central banks to the ECB top job coincided with the Retselisitsoe Matlanyane whose score rose from 0 last year are Governor, Central Bank appointment of Ursula von der Leyen as from Africa. of Lesotho (Jan 2012) European Commission president, the Europe remains the best-performing European Union’s top political post. region with a score of 37.3. Economies Caroline Abel from the former Soviet Union and the Governor, Central Bank of Seychelles (Mar 2012) Balkan region score particularly well. Europe's The world’s 14 woman-led central banks triangle of Jorgovanka Tabaković female power include those of Russia, Serbia and North Governor, National Bank Ursula von Macedonia. Bulgaria and Albania are of Serbia (Aug 2012) der Leyen among the top 20 scorers, and Latvia, Estonia, Bosnia and Croatia also earn Elvira Nabiullina Governor, Central Bank Christine Angela high marks. The Nordics, too, perform of Russia (June 2013) Lagarde Merkel well; Iceland, Norway and Sweden all score upwards of 60 while Denmark and Joy Grant Finland both earn more than 40, above Governor, Central Bank the European and global averages. of Belize (Oct 2016) Several central banks in Europe Verónica Artola Jarrín more than double their score including General Manager, Central Bank Alongside German Chancellor Angela Turkey, the Netherlands, Estonia and of Ecuador (May 2017) Merkel – Europe’s de facto political Greece, with Germany and Poland also leader – they form a triangle of female improving considerably. Still, Europe’s Irma Margarita Martínez power at the heart of Europe. All three overall score declines. In addition to Castrillón have been the first ever women to Minister President, Central Bank Chrystalla Georghadji, the Eurosystem of Cuba (June 2017) occupy their posts. lost Banco de Portugal Deputy Governor This builds on wider improvements for Elisa Fereira, who became European Anita Angelovska Bezhoska women in the international economic commissioner for cohesion and reforms. Governor, National Bank of North and financial policy-making sector. Belgium and Romania saw their scores Macedonia (May 2018) Three of the world’s major international halve, with Malta and Hungary’s also financial institutions have female Catia Tomasetti dropping. Chairman, Central Bank of chief economists: Gita Gopinath at the North America’s score slips the Republic of San Marino International Monetary Fund, Beata marginally, reflecting the end of Lynn (May 2018) Javorcik at the European Bank for Patterson’s term as deputy governor of Reconstruction and Development, and the Bank of Canada. The Middle East’s Datuk Nor Shamsiah Laurence Boone at the Organisation binti Mohd Yunus score falls for the third year in a row, Governor, Bank Negara Malaysia for Economic Co-operation and this time to 7 from 10. It takes over from (July 2018) Development. The World Bank’s Penny Asia as the world’s worst-scoring region. Goldberg stepped down on 1 March. Nine out of 14 Middle Eastern central Christine Lagarde A woman still leads the IMF, with banks earn a score of 0, unchanged from President, European Central Bank Kristalina Georgieva having taken over (Nov 2019) last year. Israel is an important outlier in from Lagarde. the region, scoring 60 and ranking 25th Such appointments are helping to Source: OMFIF analysis globally. highlight the need for diversity and GENDER BALANCE INDEX 2020 OMFIF.ORG 9

foster a culture in which it is considered imperative. But it is not always achieved. The Bank of England hired diversity specialists to replace Governor Mark Carney, whose term ends in March. Yet out of 23 applicants, only two were women and the post went to Financial Conduct Authority chief Andrew Bailey. In Ireland, Sharon Donnery, deputy governor of the country’s central bank, was overlooked for promotion to the top post upon The Guardian, April 2019 Governor Philip Lane’s move to the ECB. Instead, the role went to Gabriel Makhlouf.

The Guardian, February 2019

Ireland is not an isolated case. The Eurosystem remains largely unbalanced, with Lagarde’s appointment to the ECB contrasting starkly and visibly with the 19 male national central bank governors. A common response to the criticism of lack of gender diversity in central banks is that there is little the institutions themselves can do to correct the imbalance, as governors and others at the top tend to be appointed by national governments. But there are systemic obstacles to change that require a shift in mindset when it comes to the selection process.

It’s the team, stupid The benefits of diversity and the notion that men Financial Times, July 2019 and women can be equally effective policy-makers are largely accepted. And yet, as this report shows, institutions still fail to achieve diversity. This is partly for historical reasons. The dearth of past opportunities for women in central banking means that all too often, male candidates to a senior Bloomberg, January 2020 position have greater experience. This can mean that in a straight ‘blind to gender’ process, the best person is a man. Perhaps the selection process needs to change. This is not a call for reverse discrimination. Insisting on all-women selection lists or favouring a less qualified woman over a better qualified man can prove Bloomberg, July 2019 problematic on many levels. But it is legitimate to remind recruiters that a central bank is a team, and that they are not just picking ‘the best individuals, taken one by one in isolation’, but the best combination of minds. ◆

DANAE KYRIAKOPOULOU, Chief Economist and Director of Research at OMFIF. Research assistance provided by New York Times, July 2019 Afroditi Argyropoulou, HR Assistant at OMFIF. 10 THE SURVEY

The Gender Balance Index survey 2020 A practical guide to diversity

For seven years, the OMFIF Gender Balance Index has highlighted how too few women are leading central banks. This year, for the fi rst time, we asked central banks what they are doing to change this.

THERE IS no single solution to correct the gender gender balance. imbalance in the leadership of central banks. The global central banking community, through Instead, it requires a comprehensive approach that OMFIF and other forums, has always relied on looks at all stages of career progression and the dynamic exchanges of ideas to overcome challenges barriers that women face throughout. Saying that a and reach collective success. The GBI survey is problem exists is insuffi cient; identifying solutions OMFIF’s latest expansion of this mission. and comparing practices can show the way forward. OMFIF undertook the fi rst GBI survey to Taking gender balance seriously investigate what policies central banks have In most cases, responses to the GBI survey were in place to promote the hiring, retention and provided by offi cers in charge of human resources. upwards progression of women within their In others, they were given by individuals tasked ranks. We received responses from 46 institutions specifi cally to look after diversity and inclusion. consisting of 44 central banks and two multilateral An important part of committing to gender organisations with functions related to fi nancial diversity is ensuring that someone within the stability. Institutions from Africa, Asia Pacifi c, central bank can hold the institution accountable Europe, Latin America and North America for its actions. This could be a diversity offi cer or participated, providing a global perspective. committee, or even a separate offi ce of its own. The survey fi ndings, presented in this section Individuals in these roles can set objectives, of the report, serve as a practical guidebook for identify problems and formulate solutions. ‘Central bankers central banks and other organisations aiming to They also help measure the success of diversity can review improve gender diversity. The survey gives insight programmes and monitor their continuous the fi ndings into best practices, how they are implemented and implementation. Achieving gender balance is a and compare what gaps remain. Central bankers can review the long-term project that requires investing resources how their fi ndings and compare how their institutions fare in the people and tools necessary to reach the institutions fare relative to their peers. More importantly, they can organisation’s goals. relative to their draw inspiration from noteworthy policies that are When asked if they have assigned someone to peers. More spotlighted in each set of fi ndings. matters regarding gender, diversity and inclusion, importantly, As regulators and supervisors of other fi nancial half of respondents said that they do, although they can draw institutions, central banks can demonstrate how about one-third were performing these functions in inspiration from gender balance can be achieved through setting an informal capacity. Assigning an offi cer or a team noteworthy more supportive and inclusive policies for their dedicated to diversity suggests that the central policies that employees. By raising the bar and leading by bank recognises the need to be proactive and takes are spotlighted example, they can infl uence other actors in the its responsibility in the matter seriously. in each set of fi nancial industry to adopt similar strategies. It is If central banks lack the internal expertise to fi n d i n g .s ’ imperative that central banks do well in promoting handle diversity and inclusion initiatives, they

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...... home GENDER BALANCE INDEX 2020 OMFIF.ORG 11 sweet home ......

Half of central 50% banks have No

no diversity 35% offi cer Yes Do you have an executive and/or staff 15% member who is explicitly (i.e. refl ected in title No, but we have someone who and/or job description) ‘As regulators assigned to matters handles this and supervisors regarding gender, in an informal of other fi nancial diversity and inclusion? capacity institutions, central banks can demonstrate how gender balance can be achieved through setting have the option to engage external advisers, as especially those who face struggles that senior more supportive some respondents do. It is also useful to have executives may be less familiar with. Central banks and inclusive an executive sponsor who can help consolidate can take any of these approaches or a combination policies for their internal support for initiatives, drive momentum of them. Upon doing so, they would be expressing a employees. By for them and ensure that they are considered in fi rm commitment to advance diversity initiatives. raising the bar top-level decision-making. Among respondents Such initiatives are presented in this report, and leading by who have one, the executive sponsor is either the accompanied by insights from central bankers and example, they governor, a deputy governor or another senior economists weighing in on diff erent aspects of can infl uence o ffi c i a l . gender balance in their institutions. other actors in Assigning this responsibility to a less senior OMFIF thanks the 46 institutions who the fi nancial member of staff can also be eff ective. Middle participated in the inaugural edition of the GBI industry to managers, for example, may be more aware of survey. We hope to continue the conversation in adopt similar the day-to-day challenges of most employees, coming years. ◆ strategies.’ 12 THE SURVEY

FINDING 1: No fast way to the top

In fi nance, like in many other sectors, women are much less likely to occupy senior management posts than men. Quotas are increasingly used to speed up gender balance in the public and private sectors, but they remain a rarity in central banking.

Widespread resistance 84% No Do you have a gender quota for your board of directors or monetary 11% policy board? No, we do not have a quota but we have a target

4% Yes

WOMEN across the world are seeing more and more not part of it. This means selection on merit will continue opportunities open to them. We are making good to favour men. This cycle will continue unless structural progress towards gender balance when it comes to schools, barriers that harm women’s chances are removed. universities and labour market participation in most In the absence of quotas, progress requires achieving jurisdictions. But almost universally, equality is pyramid- a change in culture. New policies that support women’s shaped. Whether in politics, business, or – as this report progress need to be introduced and implemented. These can shows – central banking, women fail to reach the top. take a long time to show eff ect, but small steps can make a Gender quotas are increasingly used as a tool to speed up big diff erence. One respondent to our survey highlighted progress in both public and private sectors. Political parties that while there are no quotas or targets, the central bank across the world, from Spain to Australia, have quotas for ensures that ‘the recruiting panels for manager positions are candidates they run in elections. Brazil, Mexico, Finland composed by 50% female recruiters’. This can help remove and India all have varieties of gender quotas for legislative unconscious bias from selection panels and increase chances and local government positions. Iceland, Norway, France, that gender diversity is considered, even if there are no the Netherlands, Italy and Belgium have introduced gender mandatory quotas to enforce it. quotas for corporate boards. But in central banking, quotas are still a rarity. Most of our Spotlight 1 sample (84%) report that they do not have gender quotas in France’s 2012 Sauvadet law introduced a gradual quota for place for senior management positions, such as on the board the appointment of women to senior management positions of directors or monetary policy board. Only two institutions in the public sector. In the case of the Banque de France, this in our sample of 46 have quotas in place. Some – mostly applies to the Conseil Général. Currently the CG is made up European – organisations said that while they do not have of the governor (male), two deputy governors (one male, one a quota, they have a target, in most cases that one-third of female) and eight other members (four of each gender). The positions should be fi lled by women. Banque de France has scored above the global and European The resistance against quotas is twofold. For the selector, average in all years in which we have prepared the Gender there is an aversion to limiting the pool from which they can Balance Index. choose, and they want to protect their ability to choose the best candidate. For the potential benefi ciaries, they want Spotlight 2 to be selected on merit alone. These are valid arguments in In June 2019, Article 41 of the Mexican constitution was theory and will, we hope, one day apply in practice. Until reformed to establish that the Banco de México has to then, the pool from which to choose is limited anyway, comply with the gender parity principle when appointing the because women who are not realising their potential are members of its governing board. ◆ GENDER BALANCE INDEX 2020 OMFIF.ORG 13

Real-world engagement

For central bankers, ensuring a meaningful voice at the table for

CAROLYN people of diverse identities means richer discussions and better WILKINS outcomes. Senior Deputy Governor, Bank of Canada THE case for diversity and inclusion in central understand how different segments of society banks is clear. As public institutions, they need perceive the dynamics of inflation. While we to better reflect the societies they serve. Doing target the consumer price index, individuals so reinforces their credibility and enhances experience inflation differently. For young their legitimacy. Central bank leaders recognise people, housing and education costs matter most. that welcoming diverse views at the table leads For older Canadians, healthcare costs are of to improved policy outcomes. Economist John particular concern. And for indigenous peoples, Maynard Keynes got it exactly right when he said, the high levels of prices in remote communities ‘It is astonishing what foolish things one can pose much greater challenges than any year-on- temporarily believe if one thinks too long alone, year price increases. particularly in economics.’ Indirectly, these deeper and broader There are two examples at the Bank of Canada interactions have added a richer lens to our that illustrate perfectly the benefits of diversity policy-making. Regardless of the results of our and inclusion for policy-makers. 2021 review, we will be better positioned to First, several central banks have embarked incorporate more perspectives into the day to day on strategic reviews of their policy frameworks. conduct of monetary policy. These require taking into account lessons from the 2008 financial crisis and its aftermath, Beyond expertise and the seismic shifts taking place in these Second, the BoC is carrying out world-leading institutions’ economies and broader societies. research in financial technology, most notably The Bank of Canada has undertaken such studying a central bank digital currency. This reviews every five years since it implemented requires a multi-disciplinary approach involving, inflation targeting nearly 30 years ago. Our among others, economists, data scientists, current review culminates in 2021. It consists of experts in computer-human interaction, software a side-by-side comparison of inflation targeting and hardware developers, and payments experts. against alternative frameworks. We are also It combines theory with practical reality, strengthening our monetary policy toolkit and enriching our research and challenging our studying the interactions among monetary, thinking at every step. However, top quality work macroprudential and fiscal policies. requires more than calling on diverse expertise. An ambitious review requires inclusive We strive to ensure a meaningful voice at the consultations. It shouldn’t be too technical, table for people of diverse identities, backgrounds excessively academic, or appear irrelevant to a and life experiences. broad set of stakeholders. After all, our policies Moving forward, there is a need to broaden this affect everyone in our society. engagement. We must reach out to the payments With that in mind, we are engaging with a systems community, the financial sector and ‘We are much wider range of interests, from students the design community. But we also need to engaging to seniors, from poverty advocates to labour understand the perspectives of poverty groups, with a much representatives. Their input is already impacting remote communities, and those with limited wider range of our work. access to the financial system. interests. Their Diversity and inclusion matter. For central input is already Understanding diverse needs bankers, these can translate to richer discussions, impacting our We have added an area of research that is, better outcomes, and greater accountability to work.’ in many ways, elemental – seeking to better the citizens we serve. ◆ 14 THE SURVEY

FINDING 2: A case for quotas

Quotas inevitably raise questions of meritocracy, but meritocracy only works when the playing fi eld is even. The lack of high-profi le female central bankers discourages women from pursuing a career in this community, perpetuating gender imbalance.

Gender 76% Interview imbalance No shortlists 59% starts at the 17% missing out No bottom No, we do not have on female a quota but we Do you have a gender talent have a target quota (i.e. required When hiring for a female-to-total ratio) 7% vacant position, do you for each intake of N/A – no regular have a policy to ensure 41% entry-level staff (i.e. intake of junior that both female and Yes graduate programme, s t a  male candidates are junior staff members, selected for interview? etc)? 0% Yes

QUOTAS are the fastest way to increase female This would usually require additional eff ort on the part of the representation and improve gender balance, but they recruitment team. inevitably raise questions of meritocracy. However, When asked if they have a policy to ensure that both men meritocracy only works when the playing fi eld is wide and and women are interviewed for any vacant position, 41% of even. In central banking, labour market failures prevent central banks said that they did. Upon further probing on the women from entering this workforce. details of the policy, it became clear that about one-third of One market failure is information asymmetry. When those who responded ‘Yes’ were not actually implementing women are unaware of career opportunities in central one. Like many of those who responded ‘No’, they abide by an banking, they are unlikely to pursue this path. It may be ‘equal opportunity’ principle in recruitment. They do not – or because there are few well-known female central bankers, are legally not allowed to – discriminate against either sex, leaving women with no role models. It may also be due to a which means they are unable to discriminate positively in general misconception that economics and fi nance are for favour of women. men only. This creates further information asymmetry on the A remedy would be establishing a diff erent set of procedures side of recruiters: when they receive an overwhelming number for departments that are heavily gender-imbalanced. This of applications from men, there is little incentive to search for would allow the organisation to impose a gender quota in equally qualifi ed women. the recruitment process, with the option to remove it once This builds the case for quotas and targets. Forcing internal targets are met. While having female interview recruitment teams to hire, or at least interview, a certain candidates does not guarantee that a woman will be hired, the number of women for vacancies means an organisation’s staff policy will have the desired eff ect on the recruitment process. has a higher chance of achieving overall gender balance. It will encourage recruitment teams to widen their nets and Less than one-fi fth of central banks surveyed have a gender target qualifi ed women for vacancies, especially in cases target for junior staff , suggesting that few central banks are where this might not have been a practice before, without pursuing diversity among new hires. Having some form of violating any laws that prohibit discrimination. gender quota or target for more junior positions helps ensure that an organisation will eventually have suffi cient women to Spotlight consider for leadership roles in the future. Germany’s Federal Equality Act requires a 50-50 male-to- Another way to make sure that an organisation female ratio in interview pools for vacancies in a group where hires enough women is through the interview process. women are underrepresented. The rule also applies when men Guaranteeing that interview pools have at least one qualifi ed are underrepresented in a group. The law governs all national woman can be a challenge when recruiting for certain government agencies, including the Deutsche Bundesbank. ◆ positions that tend to attract and are typically fi lled by men. GENDER BALANCE INDEX 2020 OMFIF.ORG 15

The path-breakers’ duty

A gender imbalance in economics gives girls the impression that it is

FERNANDA a career path reserved for men. They need role models to promote an NECHIO inclusive work environment. Deputy Governor, International EARLY in my career as an economist, I became at work. Women make up more than half of Brazil’s Aff airs and Corporate Risk accustomed to being the only woman in the room. population. Their underrepresentation in so many Management, This was true when I interned at an investment fields of the country’s public life reinforces the need Banco Central do bank during my studies, and continued as I for policies and actions in our institutions aimed Brasil progressed in my profession. Unfortunately, my at reducing gender imbalance and making sure all experience is not unique and seems to be an workers have the same opportunities. enduring peculiarity of our profession. To change the culture that has rendered At my alma mater, around one-third of economics such a male-heavy career path, and undergraduates and a quarter of post-graduates make the sector more diverse and inclusive, it studying economics are women. When it comes to is important to be proactive. As leaders in our women venturing into the fields of macroeconomics profession, we are responsible for growing the or finance, women’s participation is even more pipeline for a diverse group of future economists. limited. The lack of prominent female economists We must reach out to girls and minorities at erodes the sense that this is a common career path different ages and introduce them to the possibility for young women. This can be the first deterrent to of being an economist, and the different career a girl considering a career in economics. paths available in the field. It is our duty to The relatively few women who go on to pursue a guarantee a safe and inclusive work environment, PhD in economics are faced with an environment amplifying our efforts to provide information, that is often seen as unwelcoming. Women make up support and guidance, and to discuss opportunities a small share of the full-time professors at my local and career paths in our institutions. university. The absence of critical mass can send I have been fortunate enough to have female the message to young women that this profession is mentors in my career. They taught me that not for them. ‘diversity is essential as a value and a practice’, to The gender distribution at Banco Central do quote Mary Daly, president and chief executive Brasil mirrors the imbalance of the economics officer of the Federal Reserve Bank of San profession. Over the past 20 years, women have Francisco. Acknowledging the influence of mentors accounted for around 20% of staff. A similar share on our own professional lives, we should serve as of women occupies leadership positions at the BCB. role models and mentors ourselves. ◆ For the first time in history, two women sit on the central bank’s governing board, representing 22% of its members. Fostering an equitable and safe work environment for women and minorities is one of our institution’s objectives.

‘At my alma Clearing the path mater, around With that in mind, the BCB is taking a holistic one-third of approach to ensuring equal opportunities and a undergraduates respectful workplace. In the last year, the bank and a quarter of has initiated a set of actions including workshops post-graduates on harassment and discussions on gender issues studying among a group of female employees. Instigated by economics are this group, in March 2020 an internal campaign women.’ will take place to promote appropriate behaviour 16 THE SURVEY

FINDING 3: Imperfect competition

There are mentorship and training programmes to encourage diversity, but these don’t go far enough. The majority of institutions shy away from measures to ensure both men and women are interviewed for promotions.

Almost half of 46% Majority trust respondents 28% None market forces to have no Other/s level the playing 76% 26% policies to fi e l d No Leadership training support specifi cally for In promoting staff to women’s f e m a l e s t a  vacancies in senior management (e.g. executive progression 22% committee, management Do you have any of the Diversity committee, deputy 24% and/or governors, assistant deputy following programmes Yes that encourage the unconcious governor, etc.), do you have upward progression bias training a policy to ensure that both of women within your for all sta female and male candidates institution’s ranks? are selected for interview? 22% (Check all that apply.) Mentorship programme specifi cally for female sta

A COMMON response to the call for measures to address Some of those that responded ‘no’ have softer measures the lack of diversity is that the choice should come down in place to help achieve balance. One central bank said to who is the best candidate, regardless of gender or other that ‘managers are invited to guarantee equal opportunities characteristics. But the competition is far from fair. to their staff in terms of tasks, working groups and Because of a historic dearth of opportunities, there are responsibilities’ and that these requirements are taken into few women in senior positions and still too few windows account for promotions. Another reported that having a good for advancements. Network eff ects are important. Several gender balance of candidates being interviewed is supported institutions in our survey sample have introduced through ‘inclusive employee development and succession programmes targeted at encouraging the upwards planning practices’. progression of women. The most popular measure is Another way to ensure that women are given a fair chance leadership training for female staff , which more than a to progress is to make selection panels more focused on quarter of survey respondents have implemented. diversity. One central bank reported that even though it has Mentorship programmes are also popular, in place in just no policy to guarantee both female and male candidates over one in fi ve institutions in our sample. Some institutions are selected for interviews, they ‘ensure that the recruiting have programmes in place for men and women alike. This is panels for manager positions are composed by 50% female welcome. Instituting mentorship opportunities internally recruiters’. Several respondents have specifi c training helps correct the lack of availability of opportunities to programmes in place to address the issue of unconscious bias. women who are not part of informal ‘boys’ clubs’. Such measures can support women’s careers in a gradual Spotlight way and are fairly uncontroversial. But when it comes to In December 2019, Papua New Guinea’s Ministry of Public direct and immediate interventions, institutions are more Service introduced the National Public Service Gender reluctant to act boldly. Only 24% of institutions have a policy Equality and Social Inclusion Policy. Building on this, the to ensure that both female and male candidates are selected Bank of Papua New Guinea has developed a strategy for for interview when promoting staff to senior management. leadership training and mentorship specifi cally for women. For some respondents, this applies only when recruitment is The GESI off ers ways to avoid biases in recruitment. It outsourced to headhunters, who must abide by quotas for the designates ‘women in decision-making’ as a priority area and total number of female applicants and those shortlisted for presents strategies to encourage women’s progression, such as interview. training and development, mentorship and coaching. ◆ GENDER BALANCE INDEX 2020 OMFIF.ORG 17

Category error

Measuring diversity purely by gender can result in cultural bias and the

RHONDA exclusion of marginalised groups. To better craft policies, central banks VONSHAY should disaggregate gender data by ethnicity. SHARPE President of the Women’s DIFFERENCE characterises diversity, but also recruitment and retention policies to increase Institute for Science, Equity serves as a basis for exclusion. Historically, the representation of women from marginalised and Race diff erence defi ned by gender or ethnicity has been groups. These women are the most economically used to exclude women and non-whites from full and socially vulnerable. US legal scholar Kimberlé participation in economic activities. Crenshaw pioneered the study of intersectionality Failure to break down gender data by ethnicity to address the specifi c ways in which black women is an example of cultural bias – white (European) are subordinated. She suggests that any policy that women are the norm. Failure to break down claims to refl ect female experiences and aspirations ethnicity data by gender is another example of without including or speaking to marginalised cultural bias – men are the norm. When ethnicity women is in eff ect othering these marginalised and gender data are disaggregated, the results women. Therefore, recruiting women from minority can inform policies to increase the economic groups to serve in key decision-making positions participation of targeted groups, rather than a that interface with customers and infl uence standardised approach aimed at women or ethnic monetary policy is crucial for the economic groups. wellbeing of society. Central banks have a social obligation to refl ect The Bank of England runs a sponsorship the societies they serve. To do so, it is important programme designed to increase the profi le and for them to separate data by ethnicity or other support professional development of women and characteristics historically used to exclude women. black, Asian and minority ethnic staff . While I Our increasingly global economy allows for the applaud this eff ort, research shows that for black, free migration of labour between countries and for Asian, and ethnic minority women, fi nding a multinational corporations to hire workers abroad. sponsor can be diffi cult. The BoE should collect This has led to greater diversity around the world. data using an intersectional approach, for example As this amplifi es, using the denominator ‘women’ by providing participants options to self-identify will fail to capture the diversity within this group in ways that may capture inequality in programme that should be refl ected at various levels of central outcomes. and private bank staff . Collecting and disaggregating data by ethnicity are invaluable processes to help central and Varied viewpoints private banks achieve their economic and social However, disaggregating data by ethnicity will responsibilities, but they are not enough. Banks not reduce ‘groupthink’. US legal scholar Stephen must also address how ‘women’ is used to exclude. Carter suggests that using race as a proxy does not Specifi cally, the failure to use ‘white’ or ‘European’ automatically yield diff erent perspectives. This as the descriptor for women suggests that black, ‘Policies to applies to any characteristic that defi nes diversity. Asian, and ethnic minority women are not women. increase all Varied viewpoints must be the goal, not just group True gender diversity requires recognising that the women’s heterogeneity. Separating data by ethnicity can aggregate ‘women’ refers to all racial and ethnic economic help reveal the subtlety in outcomes masked by groups, not just white (European) women. ◆ empowerment using aggregates like ‘women’, leading to better are more results. Policies to increase all women’s economic eff ective if empowerment are more eff ective if they are based they are based on nuanced information. on nuanced Organising data in this way will enable central information.’ and private banks to craft better diversity 18 THE SURVEY

FINDING 4: A safe and inclusive environment

Workplace discrimination is illegal in many parts of the world, and yet continues to act as a barrier to women’s success. Having clear policies against discriminatory and off ensive behavior is a strong indication that an institution is committed to providing equal opportunities to all.

Respondents Sexual 54% 50% Yes split on handling No, but we have harassment discrimination general guidelines taken seriously 37% for reporting No, but we Does your staff handbook or Does your staff handbook complaints have general any similar document contain or any similar document guidelines guidelines on reporting contain guidelines for reporting discrimination (e.g. gender, on reporting sexual harassment race, ethnicity, religion) and 48% harassment and handling handling such complaints? Yes such complaints? 9% 2% No No

PROFESSIONAL development can be nurtured through As the #MeToo movement has shown in recent years, many supportive and inclusive work environments. Women, as well women who are victims of abuse and sexual harassment as individuals from minority backgrounds, are more likely struggle to report their experience for many reasons: trauma, to confi dently pursue opportunities for advancement when fear of consequences, uncertainty that they will be believed they know that their workplace has strong safeguards against and threat of retribution from perpetrators. Given the unfair treatment, discrimination and off ensive behaviour. sensitive nature of harassment, especially when sexual in Discrimination takes many forms, but in the context of nature, it is important for women to know that there is a safe career progression, it can manifest when individuals or space where they can report off ensive and abusive behaviour. groups are overlooked for vacancies and other opportunities. Female leadership is important in dealing with workplace It could also be refl ected in diff erences in salary and the discrimination and harassment. Women in senior positions provision of other employment benefi ts. can mentor younger colleagues and make them feel more Gender discrimination occurs in situations where men comfortable talking about diffi cult and uncomfortable are favoured over women, or when employers show a bias experiences that might be understood better by someone who towards men. It could also happen vice-versa, but within has likely experienced similar. fi nancial institutions, men are more visible and form a Gender-based discrimination and sexual harassment are dominant majority. In modern workplaces, gender-based barriers to women’s success. Preventing hostile acts and discrimination is taboo. However, women are often still responding to them appropriately when they occur signal that subjected to the culture of misogyny that permeates the employers genuinely care about their staff ’s well-being and fi nancial industry. that they are committed to fostering a safe and inclusive work Although workplace discrimination is illegal in many environment. Having clear policies and guidelines against places of the world, only half of respondents have specifi c discriminatory and off ensive behaviour is a strong indication guidelines on how employees can report discriminatory that an institution is committed to protecting the dignity of behaviour. The other half have none, but they do have their employees and providing equal opportunities to all. guidelines on how staff can report complaints of any nature. Most respondents have policies against sexual harassment, while 37% have guidelines on reporting all forms of Spotlight harassment, regardless of nature. One central bank has The State Bank of Pakistan has inquiry committees a helpline for employees who experience discrimination specifically for the protection of women against harassment, and harassment in the workplace. Through the helpline, in line with national legislation. It also has dedicated employees can receive psychological and practical support to committees for both clerical and non-clerical staff, both help them deal with diffi cult and sensitive situations. chaired by women. ◆ GENDER BALANCE INDEX 2020 OMFIF.ORG 19

Championing women’s voices

To reap the benefi ts that diversity brings to decision-making,

CHUCHI organisations must foster an inclusive environment and listen to FONACIER women’s needs. Deputy Governor of the Financial Supervision BY INCLUDING women’s voices in policy- are entitled to statutory maternity leave and we Sector, Bangko Sentral ng making, the Bangko Sentral ng Pilipinas benefi ts have set up lactation rooms and a nursery at our Pilipinas from diversity and balance in the pursuit of its headquarters. We also off er scholarships and skills core mandates. This helps manage eff ectively workshops for children of BSP staff . the demands and challenges of the increasingly Every year, we celebrate Family Day and observe complex fi nancial services industry. Championing the International Day for the Elimination of gender diversity and balance within the BSP and its Violence against Women. We do this to promote a supervised fi nancial institutions is key to lasting healthy family life and protect women and children reforms. against all forms of violence and harassment. A diverse staff off ers a range of talents, skills, Moving forward, the BSP is committed to experiences, backgrounds, views and perspectives. fostering an environment in which diversity is This allows for diff erent styles of thinking in the valued at all levels of the organisation. We have decision-making process. set out a gender diversity action plan to attract Gender diversity can aff ect the quality of this more varied female candidates to key positions and process. It can guard against ‘groupthink’ by enhance internal selection processes. We aim to presenting a variety of values, beliefs and attitudes. curb the biases and prejudices that tend to act as The presence of more women in top management barriers to women’s career progression, and focus positions could help cultivate better types of more on candidates’ competence. We also plan leadership in terms of developing personnel and to encourage work-life balance and increase our setting expectations and rewards. These women accountability and commitment to issues aff ecting can also serve as role models. women. Moreover, we are working to shape the The BSP, as a modern central bank and supervisor development of products and services for women. of the fi nancial system, is embracing this change In these changing times, championing women’s in corporate culture by becoming a champion of voices and gender balance is challenging for public women’s voices. All members of our monetary servants and policy-makers, but it is the right thing board are men, but senior management positions to do. ◆ are split equally between men and women. ‘The BSP has This diverse decision-making group has a well- pursued rounded view of business issues and risks. Research various reforms shows that gender and professionally balanced promoting organisations are more likely to focus on broad- gender welfare based strategic objectives, corporate governance and work-life and risk management. balance. Female By empowering women to take a leading role employees in regional and local dialogues, committees and are entitled working groups, we can nurture their voices in to statutory central banking. maternity leave and we have Work-life balance set up lactation Guided by its core values of excellence, patriotism, rooms and a integrity, solidarity, and accountability, the BSP nursery at our has pursued various reforms promoting gender headquarters.’ welfare and work-life balance. Female employees 20 GENDER BALANCE INDEX 2020

Tone at the top Margarita Delgado, deputy governor of Banco de España, is one of the few women to have reached the upper echelons of central banking. She speaks to Danae Kyriakopoulou about strengthening the talent pipeline, gender quotas and implementing cultural change.

Danae Kyriakopoulou: Spain has Forum’s latest Global Gender Gap of success in a mainly male environment one of the world’s most gender- Report, Spain ranks highly in political are limited. Women tend to have a lower balanced cabinets. Banco de España empowerment, but lags in economic tolerance for failure and are usually tops this year’s gender balance participation and opportunity, more risk averse in their decisions, so index for central banks, although especially regarding the pay gap and they only vie for a promotion when they there is room for improvement. the proportion of women in managerial are overqualified for the position. What are the policy, cultural and positions. Spanish companies have BE’s first ever strategic plan involves socioeconomic factors that support a lower proportion of women on managing diversity in the organisation. this relative success and what can their boards than the European We have produced a detailed analysis other countries learn from your average. Nonetheless, the Spanish of gender differences in career example? market authority recently launched a progression within the organisation consultation on amendments to the to spot bottlenecks. We are developing Margarita Delgado: This success is 2015 Good Governance Code for listed mentoring programmes for young men rooted in a strong, longstanding political companies, raising the recommended and women and promoting several commitment to gender equality. In proportion of women on corporate initiatives on maintaining a good work- terms of the proportion of women in boards to 40% from 30%. life balance. its cabinet and parliament, Spain is one We need to strengthen and diversify of the most gender-balanced countries DK: A common response to the pipeline in some areas, and part in the world. This is also reflected in criticisms about lack of gender of that objective requires strong and the composition of Banco de España’s diversity in central banking (and encouraging top-down messages. governing council. other male-dominated fields) is Management must commit themselves Spanish legislation has helped that ‘the pipeline is not there’. to these goals, aligning internal policies advance equality in the workplace. The Do you agree and if so, what can and strengthening networks among gradual introduction of equal maternity institutions like central banks and peer institutions to raise diversity and paternity leave will grant new senior women from the profession aspirations and share best practices. It fathers up to 16 weeks of time off work do to encourage more women to is also important to involve women in by 2021. Spanish companies are required enter the sector? If the pipeline is leadership programmes and work with to complete a gender audit with the there, how can central banks ensure line managers to avoid unconscious bias. average salary broken down by gender, that women who are qualified and BE and the European Central Bank and progressively implement gender want to progress in the sector are have carried out a detailed analysis equality plans. These must address given a fair chance to do so? of their employees’ anonymised issues such as the selection and hiring professional profiles. This is just an process, work conditions and preventing MD: The pipeline is there. But even if example of the importance of data sexual harassment. you accept the argument that there is a transparency and something very few There is a fairly broad consensus lack of women in the pipeline, you have institutions are doing. The ability to among Spanish companies that having to question why the pipeline is leaking. systematically keep track of and analyse diverse voices in the boardroom is good There may be many potential causes for employees’ careers should help monitor for business. This trend is edging its this, such as processes for intermediate progress and make work conditions way deeper in organisations. We are positions that are blocking women’s fairer and more efficient. making progress, but women are still not career advancement. represented adequately at board level. It is possible women are being left out DK: The European Central Bank has From an internal perspective, our of informal channels of communication set gender targets with regard to governing board is committed to in the company that would allow them the share of women in management bridging the gender gap within BE and to be more effective and get promoted. boards, senior management teams, setting the ‘tone at the top’. They might feel discouraged to put and wider management teams. Such However, there is plenty of room for themselves forward for top positions measures have at times been met improvement. In the World Economic because they believe that their chances with criticism – from both men and IN CONVERSATION 21

PROFILE Margarita Delgado was appointed deputy governor of Banco de España in September 2018. She sits on the supervisory board of the European Central Bank’s Single Supervisory Mechanism. Previously, she was ‘Gender targets should deputy director general for Microprudential not be detrimental Supervision I at the ECB, to the quality of responsible for the direct candidates. Rather, supervision of the 35 biggest and most complex they should help signifi cant institutions in mobilise an as-yet the euro area. undetected talent pool.’

women – as they may constrain an DK: What has been your own central banks act as ‘allies’ for institution’s ability to appoint the experience as one of the few diversity? How can they help create most qualifi ed candidates. How women at the higher echelons of a supportive environment for would you respond to criticism? central banking and what would the career progression of female be your advice to more junior colleagues? MD: I am not particularly in favour of women looking to progress in the hard quotas, but I believe that gender profession? MD: This issue goes beyond gender. It targets make sense given that women is about cultural change. We must be face additional barriers in their career, MD: I have been lucky throughout my fair to all people working within our and this leads to a considerable loss of career. I have always felt valued as a organisations, regardless of gender. I am talent. Gender targets are a way to level person and as a professional. However, certain most men support this process; I the playing fi eld. There may be criticism I have always been surrounded by – and see that on a daily basis at BE. from some men who consider they are competed with – men; this was not always There is academic research on the discriminated against because of the easy. Like any other woman, I have often importance of critical male actors who targets, but these are the right tool to been subjected to patronising behaviour, advocate for gender equality, to avoid help rectify an unfair situation. ‘manterrupting’ or ‘mansplaining’. These this being relegated to a ‘feminist issue’ Gender targets require proper, prior habits are so common, I am happy to see and dividing the discussion into ‘men assessment of barriers and potential they have fi nally been given a name. versus women’. discrimination (mostly implicit or My advice for more junior women It is crucial to have men’s support for unconscious). Only after diagnosing would be to work hard, be prepared and all these initiatives to ensure boards the problem can you prescribe the right seize opportunities. Above all, believe are gender balanced and information medicine. in yourself and dare to take risks, even fl ows to all employees. This will help Gender targets should not be if they imply making mistakes along to encourage female colleagues to take detrimental to the quality of candidates. the way, not because you are a woman, risks, show off their successes and be Rather, they should help mobilise but because that is part of being recognised publicly for their good work. an as-yet undetected talent pool. human. Talent and hard work should be We all need to have more open and Much remains to be done on creating considered, acknowledged and promoted inclusive behaviour, by encouraging awareness and transitioning to a more no matter what ‘package’ they come in. women to apply for leadership positions, diverse and inclusive culture, but this focusing on results rather than on is sure to bear fruitful results in the DK: How can men leading and attendance control, and supporting medium term. working alongside women in female leadership networks. ◆ 22 THE SURVEY

FINDING 5: Pushing parental leave

Building a pipeline of well-qualifi ed, experienced female central bankers means supporting them through all stages of their careers, including when they start families.

All 52% Paternity leave 50% Adheres to the legal Adheres to the legal respondents requirement is becoming requirement grant some the norm 37% 26% form of Goes beyond the legal Which of the following Goes beyond the maternity requirement describe your paternity legal requirement leave policy? leave 9% 17% Which of the following No legal No legal describe your maternity requirement, requirement, leave policy? but we have an but we have an internal policy internal policy 0% 2% No policy No policy

IN MANY parts of the world, and particularly in industries central banks can help set an example and build momentum that have few women, granting maternity leave is still for better policies. The respondent with the longest maternity perceived as a burden rather than a benefi t to the whole package off ers nearly three and a half years, composed of organisation. Parental leave, or leave taken by either the six months’ maternity leave and three years of parental mother or father in the period beyond the initial maternity or leave. However, renumeration during parental leave is a fi xed paternity leave, suff ers from a similar stigma. To benefi t from amount provided by the state, regardless of the person’s salary. talent retention, central banks need to establish progressive Durations of paternity leave off ered are much shorter. maternity, paternity and parental leave policies to encourage a Pregnancy and childbirth do not take a toll on fathers’ bodies, culture shift that accepts them as the norm, rather than a form but granting paternity leave is important to ensure that of preferential treatment for parents. mothers have suffi cient support while they recover from All survey respondents off er a maternity package. One childbirth and that the infant is well looked after. Among central bank did not have a corresponding policy for fathers, respondents, 41% off er between one to two weeks of paid although this may change through legislation that has been paternity leave. The shortest leave off ered by a respondent is proposed in that country. Of respondents, 37% went beyond one day, while the longest is 12 weeks. Other central banks the statutory requirement for maternity leave, while 26% off er much longer periods as shared parental leave, meaning did the same for paternity leave. Competitive packages that fathers can take it if the child’s mother does not. Out of that are above the minimum legal requirement increase all respondents, 17% grant between eight months to three the attractiveness of working for an institution. Maternity years of this type of shared leave. Based on anecdotal feedback, packages can be compared based on paid leave entitlements organisations that off er parental leave observe low uptake off ered before and after giving birth, but some central banks among fathers. Encouraging all parents – regardless of sex – provide supplementary benefi ts, such as breastfeeding leave, to take advantage of parental leave can help normalise family- parental leave and childcare support. related career interruptions and remove the gendered bias There is plenty of variation in how maternity leave may be against mothers who take maternity leave. taken, the length of time covered and renumeration off ered. This creates diffi culty in calculating an average, but 63% Spotlight of responses fall between three to six months of paid leave. In the survey sample, Bulgaria off ers the longest maternity leave Three institutions off er the shortest maternity leave of only with close to full pay. The country’s Labour Code grants mothers two months. Another off ers 14 weeks of fully paid leave, an 410 days of maternity leave, which includes 45 days of pre-natal improvement from the statutory requirement of only 10 weeks leave. Compensation provided by the National Social Security on 80% pay. This respondent’s government is due to extend Institute is equivalent to 90% of gross salary for the whole the legal requirement to 14 weeks in 2021, demonstrating how period. ◆ GENDER BALANCE INDEX 2020 OMFIF.ORG 23

Improvement through measurement IRENE Central banks are making inroads in redressing the structural inequalities ESPINOSA CANTELLANO that are preventing individuals from reaching their full potential. Deputy Governor, Banco de México ACROSS advanced and developing countries, BdM is evaluated externally against national and structural inequalities and social norms have led international certification standards to objectively to a persistent, systematic underrepresentation measure our progress and provide us with a of women’s labour force participation. In Latin benchmark. America, the share of women in central banking This framework has started to deliver positive falls below that in other sectors. Banco de México results. The bank now attracts more women, at is no exception. Breaking these patterns to tap into all levels of responsibility. This is thanks to the women’s potential requires profound institutional implementation of practices such as unbiased and cultural change. recruitment processes and flexible work schemes. Executives at the top of the ladder are the best We have extended maternity and paternity leave advocates for cultural change. In 2018, BdM’s board and introduced nursing rooms and childcare of governors endorsed publicly labour equality support. The committee has pushed for an annual and non-discrimination as institutional strategic gender pay gap analysis to monitor the fairness objectives, a strong message that resonated of payment between men and women in similar throughout the central bank. To demonstrate its jobs, and an improved, anonymous system to commitment to the cause, the board instructed report violence in the workplace, including sexual the creation of the labour equality and non- harassment. discrimination committee, which is chaired by Our equality and non-discrimination policy has a board member. As a consultation and advisory laid out an economic research agenda to better body, the committee is representative in terms understand women’s labour force participation, of gender, departments and responsibility levels. the macroeconomic effects of their economic Its objective is to propose and follow-up on the empowerment at household level and the barriers implementation of policies and practices for they face in the field of economics. In addition, BdM equality. A specialised gender, diversity and has called for the inclusion on banknotes of key inclusion subdivision provides support, and advises female figures in Mexican history to commemorate on this process, which it coordinates. As its first their contributions to the society. duty, the committee proposed an institutional and Much remains to be done, with important participatory policy to foster a culture of equality challenges ahead. However, I am certain that and non-discrimination. The aim is to ensure BdM and other central banks around the world everyone working at the bank meets their full are moving in the right direction to rectify potential, with equality taken into account in all of the structural inequalities and dismantle the BdM’s core functions. social norms that prevent traditional victims of discrimination – especially women – from reaching Equality framework their full potential. ◆ Our institutional design for gender equality ‘We have includes accountability mechanisms. Our equality extended and non-discrimination policy and its action plan maternity and allocate specific milestones and key performance paternity leave indicators across all of the bank’s departments. and introduced Every four months, senior management updates nursing rooms the board of governors on progress made on these and childcare goals and the committee prepares a simplified support.’ annual report for all employees. Every two years,

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...... 24 THE SURVEY home

FINDING 6: sweet home Flexibility for families ...... Parenthood does not end after parental leave. Arguably, it becomes harder when parents return to work. Central banks need to support staff who have parental and caregiving responsibilities even after they have re-entered the workforce.

A quarter 42% Most 74% of central Childcare subsidy central Flexible hours banks do 33% banks give 54% In-house or Part-time work not provide a liate childcare employees childcare facility of any kind fl exibility 48% Remote working or benefi ts 24% Do you off er any working from home of the following Do you off er any of None fl exible working 17% the following forms of 2% arrangements? childcare support? Job sharing (Check all that (Check all that apply) No standard policy, but apply) 13% considers None requests as 13% they arise No standard policy, but considers requests as they arise

WOMEN OFTEN take up caregiving responsibilities, but these Although fl exible working arrangements are becoming are not inherently gender-specifi c. Men also benefi t from mainstream for most central banks, providing childcare support supportive policies established by their employers. Support is less common. Less than half off er childcare allowance, subsidies can come in two forms. Flexible work arrangements enable or reimbursement, which can help cover the cost of hiring a employees to complete their work beyond the conventional nine- childminder or using a childcare centre. One central bank off ers to-fi ve model. Receiving childcare benefi ts can help them work a summer school subsidy, which helps parents who might not be typical hours while making sure they have the resources to hire able to aff ord full-time care for school-age kids throughout the someone to look after their child. summer holidays. Another said that it off ers no form of childcare Most central banks recognise the need for fl exibility. Three- support, but only because the opening times of local childcare quarters of respondents off er fl exible hours, enabling staff to facilities are aligned with working hours. Only one-third of adjust their hours in a way that suits their familial needs. Half of respondents have childcare facilities. These are ideal for mothers respondents also give the option of reduced hours or part-time who are still breastfeeding, as well as for children who might have work, which can allow employees to continue their careers even special needs and require their parents to be nearby. Having these when they need more personal time than working full-time facilities in-house also reduces parents’ commute, leaving them permits. Job-sharing is a less common form of fl exible working, with more time for both work and family. with 17% of central banks off ering it as an option. It is usually Central banks and other employers should not penalise their applied to roles that demand normal, full-time hours. This employees for having children or other family members to take arrangement entails two part-time employees dividing the work care of. Instead, they should provide fl exible and meaningful between them. benefi ts that help relieve the burdens of parenthood and family Of respondents, 13% have not established standard fl exible life. Doing so is not just an investment in their staff , but in wider working policies but are open to considering requests on a societal wellbeing. case-by-case basis. While this is helpful, it is always better to set standard policies and guidelines to ensure that employees Spotlight are aware of their options. Having standard policies also Tunas Kij ang, Bank Negara Malaysia’s childcare centre, was built prevents subjectivity in how they are applied. It removes any in 2012 to give central bank employees a convenient place to leave psychological burden on employees when they request for their children. The centre can accommodate around 400 children, fl exibility, which could include worrying if their request will making it one of the biggest childcare facilities in the country. be accepted and if it is being wrongly perceived as seeking It was set up for infants as young as three months old, with preferential treatment. preschool facilities for children up to six years of age. ◆ GENDER BALANCE INDEX 2020 OMFIF.ORG 25

Modern family Dual-career couples are no longer the exception, but pockets of the fi nancial

DANIELLE world still think traditionally and need to change their mindsets to support ANEV JANSE modern families. Economist, Commission de Surveillance du IT IS 6.20am when the alarm goes off . Neither of change mindsets enough for true gender equality Secteur Financier us feels ready to start the day, as the night brought to become reality. Trying to split domestic KALIN a few surprises and ended with us sharing our bed responsibilities equally while both pursuing ANEV with our two children. Nonetheless, (work) life careers still provokes a reaction for either of us. JANSE goes on, and so we rush through working parents’ Some may challenge Kalin for taking parental Chief Financial morning routine. As Kalin drops the children off leave, questioning whether a man should take it, or Offi cer, European Stability at nursery, he has rescheduled his meeting to start whether a board member should be on leave. Some Mechanism at 9am, which is the earliest he can make it to the even ask, ‘Don’t you have a wife to take care of your offi ce. Both of us have a busy day ahead at work, children?’ while we try to keep the impression of our parental In practice, perceptions matter. What we exhaustion to a minimum. Kalin travels out of discovered as a couple is that Kalin tries to over- town, so the nursery pickup and evening routine communicate his family obligations. Conversely, falls on Danielle. A last-minute, late afternoon Danielle under-communicates them, to avoid the meeting invitation causes some stress. It is almost impression that her career has low priority. Pockets time for the evening routine to start. The day of the fi nancial world still think traditionally. ends how it began: asleep in bed together with the But there are positive developments. The children. European public sector is leading the way. The This is the verse of our daily lives. For many European Stability Mechanism has introduced couples trying to combine a career and family life, generous and diversifi ed human resources policies it probably sounds familiar. The 20th century was to support dual career families, including paternity the age of creating equal opportunities, such as leave, parental leave, teleworking and paid leave ensuring the same voting rights for women and to care for sick children. Luxembourg has made men. The 21st century must be the age of true its parental leave policies more fl exible and equality, from equal pay and top management increased its paternity leave and child sick leave. positions, to equal burden-sharing at home and In European countries, more and more fathers are caring for children or elderly parents. seen on playgrounds while mothers are at work. Dual-career couples are now the norm rather And among younger fathers, foregoing the right to than the exception. It means both need to strike parental leave is starting to be considered strange the balance in fi nding professional satisfaction behaviour. and success while raising children or caring for The previous generation fought for equal rights elderly parents. Clear communication and back- for women. This generation is fi ghting for overall ‘The 21st century up plans are a necessity. If the children are ill, equality. As European public sector employees, must be the age we need to decide who stays home. If we have we are lucky to be at the forefront. Imagine if the of true equality, overlapping business travel plans, only one of us entire world followed. We would live in a diff erent, from equal can go. If a meeting runs over, someone needs to better world. ◆ pay and top pick the children up from nursery. The challenge management encountered by many couples is trying to fi nd the positions, to right balance. Trying to do both well can sometimes equal burden- feel like succeeding at neither. sharing at home and caring for Perceptions matter children or Many institutions have robust rules and elderly parents.’ procedures in place, but more work is needed to 26 GENDER BALANCE INDEX 2020

What corporations can do

The task before companies is not to fi nd ways for women to better fi t

LAURENCE the current business model, but rather to rethink the model entirely so KARAGULIAN they can create inclusive places to work. Director, Financial Services, Mazars in the US In the last decade, numerous authoritative studies opportunity to learn how they can boost diversity. PAULINE have proven the strong correlation between gender In the UK and France, Mazars runs ‘returner PÉLISSIER diversity in companies’ top management and programmes’ that help women who had paused Director, their performance. The McKinsey Global Institute their careers to re-enter the workplace. In the US, Financial Services, estimates that achieving gender equality in the we launched Women@Mazars in 2016, an initiative Mazars in the UK workplace could add $12tn to global GDP by 2025. that connects women to sponsors to gain clarity CÉCILE Research has shown year after year that companies on the path to senior positions, off ers training KOSSOFF in the top quartile for female participation in to end unconscious bias, and highlights personal Group Chief Brand, executive committees outperformed their peers – leadership stories to make women’s success more Marketing and at times by up to 55%. visible. Communication The causes of the gender gap are widespread and O ffi c e r , M a z rs a well-known, from faulty talent pipelines that fail Equality checklist and other tools to retain the best leaders, to unconscious bias – We recently worked with the Observatory for outdated perceptions that women cannot work to Gender Balance to develop a gender equality the same level as men – and unequal expectations checklist for chief executive offi cers. This is a way related to ‘unpaid care work’. for them to assess whether their company has As employers, corporations have a signifi cant role implemented the measures essential to achieving to play in addressing the gender gap, particularly gender diversity. Mazars, alongside a number of in areas of the world where public policy lacks. large companies, is piloting the checklist internally. Mirroring the battle against climate change, In addition, we have developed assessment corporations have a social responsibility to step up solutions for our clients that reveal the diversity and tackle one of the defi ning issues of our time. of an organisation and its processes, while also How they choose to do so could range from spotting the disparities between an organisation’s implementing inclusive human resources policies desired and actual culture of diversity. that better manage maternity and paternity leave, We have also built a predictive analysis tool that normalising a work-life balance and reviewing what takes a current employee structure, forecasts its ‘good performance’ looks like. Perhaps it is time to evolution based on current trends and allows the retire the harmful ‘long hours, no breaks’ mindset. client to determine new parameters and set targets Systematic training at all levels could address to increase the team’s gender diversity. A module unconscious bias, as could committees responsible is also incorporated to generate an organisation’s for recruiting and appraisal decisions. gender pay gap reporting. At Mazars, we have developed several strategies The task before corporations is not to fi nd ways to achieve a greater gender balance in our own for women to better fi t the current business model, offi ces and for our clients. but rather to rethink the model entirely so they While 53% of our global workforce (in certain can create inclusive places to work. Diverse teams countries, such as South Africa, that number perform better. Any business that wants to compete ‘Corporations jumps to as high as 60%) and 55% of our group in the coming years needs to end gender inequality have a social governance council are women, we have set specifi c now. ◆ responsibility global targets to increase the number of female to step up and partners by 2025. We have also held the annual tackle one of the Women Leaders Seminar since 2016, which covers defi ning issues essential topics such as empowerment, visibility of our time.’ and development, and gives our senior leaders the GENDER BALANCE INDEX 2020 OMFIF.ORG 27

N e t w o r k e ff e c t s

Correcting gender imbalance in the asset management industry requires

SARAH a multi-pronged approach, from supporting women in the workforce, to MUNDAY encouraging girls to pursue a career in the industry. Director of Sustainability, Barings HIRING, retaining and supporting talented 2014, 57% of the alumni who have taken up full women is critical to Barings not only because time positions at Barings have been women. it is the right thing to do. As a global financial Third, it is important to encourage girls to services firm, we are made stronger and more pursue a career in finance. We partner with innovative by having a balanced workforce organisations that aim to educate girls on comprised of different perspectives and working in financial services. These include collaborative thinking. Tomorrow’s Leaders, a UK programme Currently, 40% of Barings’ staff are women working with school-age girls of African and and year-on-year figures show we are increasing Caribbean heritage. Another is Smart Woman steadily the number of female hires globally. Securities, a US non-profit whose mission is to Gender split is also monitored in terms of educate undergraduate women on finance and level of seniority and number of investment investments through seminars and exposure to professionals compared with other roles. successful professionals. To address gender imbalance within Barings For 14 years, Barings has been running the and the asset management industry as a whole, award-winning programme See the Possibilities. we employ a multi-pronged approach. The firm engages with 57 educational First, supporting our female workforce is institutions across the UK and Europe. Events key. Following in the footsteps of Barings’ US and workshops provide students with an Women’s Network, in September 2019, Barings introduction to Barings and asset management. established a Women’s Network in Europe. The It is important for students to see role models aim is to provide peer support and personal and with whom they can identify. Barings employees professional development opportunities. ‘Power from different areas of the business, at different of 10 partnerships’, a recent addition to the levels of seniority and from diverse backgrounds network, are smaller networking and mentoring take part in panel discussions and facilitate groups of up to 10 women. Within these, specific workshops to give students the opportunity issues are raised and addressed, including to engage in a stimulating environment. practical and cultural barriers that can prevent Although the programme is not exclusively women from realising their career potential. targeted at women and girls, we encourage Second, we are committed to building a female participation. Out of the 190 students gender-balanced talent pipeline. A two-year that participated last year, 60% were female. analyst programme was set up to overcome the Students who complete See the Possibilities can ‘It is important dearth of junior talent coming into Barings. This potentially go on to join the 10-week graduate to encourage sits alongside a 10-week graduate internship internship programme. There are plans to girls to pursue programme, which gives participants an launch it in Asia in early 2020. a career in introduction to the company before successful These are just a few of Barings’ initiatives fi nance. We candidates move into the analyst programme. to help improve gender diversity. We have partner with The analyst programme places and trains made inroads but know that there is still much organisations junior professionals in several of our investment to accomplish. Human resources initiatives that aim to teams. At the end of the two years, based on promoting gender diversity and programmes educate girls the firm’s need, high performing analysts may designed to address gender imbalances are on working be offered a full-time opportunity from the important, but to accelerate progress, our in fi nancial respective group, or another group with a need ultimate goal is to make this a priority on every services.’ for junior talent. Since the programme began in line manager’s agenda. ◆ 28 SOVEREIGN FUND FINDINGS

+8 % Global score rises to 19 Funds fail to diversify from 17 Through their investment choices, sovereign funds are ideally positioned to shift the gender balance. Unfortunately, they count very few women among their top ranks.

AS RESPONSIBLE investing grows in prominence, sovereign funds are Gender Balance Index score, top 20 sovereign funds 2020 ideally positioned to steer investors towards achieving environmental, social and governance goals. This Rank Score AUM$bn includes promoting investments that support gender diversity and women’s 1 Victorian Funds Management Commission 96 ▲ 83.22 empowerment, whether through active ownership strategies or the adoption of 2 Heritage and Stabilisation Fund 92 ▲ 5.97 other gender balance initiatives. Unfortunately, sovereign funds’ 3 Permanent Wyoming Mineral Trust Fund 80 ◀ 7.81 management teams and boards are 4 Mumtalakat Holding Company 76 ▲ 15.40 far from gender-balanced. Out of 72 sovereign funds in the Gender Balance 5 Alaska Permanent Fund Corporation 72 ▼ 63.94 Index, only eight are headed by women, unchanged from last year. 6 Fondo de Estabilización Fiscal 69 ▲ 5.77 The GBI score for sovereign funds increases marginally to 19 from 17, 7 Ghana Petroleum Funds 66 ▼ 0.87 suggesting that state-owned assets are still controlled by male-dominated 8 Funds SA 65 ▼ 24.13 teams. Sovereign funds are failing to take advantage of the benefits of gender 9 Permodalan Nasional Berhad 56 ▼ 71.34 diversity. 10 Petroleum Fund of Timor-Leste 54 ◀ 16.51 Females in funds While the overall score is low, there 11 Caisse des Dépôts et Consignations (France) 53 ▲ 499.92 are notable developments. Australia’s Victorian Funds Management 13 Queensland Investment Corporation 52 ▲ 64.39 Corporation tops the index, achieving 13 New Zealand Superannuation Fund 50 ◀ 25.91 the highest score among sovereign funds. The appointments of Ezinne 14 Caisse des Dépôts et Consignations (Tunisia) 50 ▲ 499.92 Udeh Martinez as executive manager for investments and Talieh Williams as 15 Fundo Soberano de Angola 47 ▲ 5.01 head of investment stewardship propel the fund’s score to 96. The leadership 16 Texas Permanent School Fund 43 ▲ 46.52 team is composed of 13 individuals, six of whom are female, including chief 17 New Mexico State Investment Council 42 ▼ 23.97 executive officer Lisa Gray. The eight- person board includes five women. 18 Alabama Trust Fund 41 ▲ 10.00 The Middle East shows the best improvement in score, but remains the 19 Russian Direct Investment Fund 40 ◀ 3.24 worst-performing region overall. Its score more than doubles to five from just 20 Excess Crude Account (Nigeria) 39 ◀ 0.63 two last year. Key appointments in some of the region’s biggest funds drive the 20 Norges Bank Investment Management 39 ▲ 1060.9 increase. The Kuwait Investment Authority Source: OMFIF analysis, institutional annual reports triples its score to 18 from 6 through GENDER BALANCE INDEX 2020 OMFIF.ORG 29

presidents for project management and bigger funds in the region remain Sovereign funds gender human resources, respectively. Bahrain’s lacking in gender diversity. Four funds, balance index score sovereign fund is an outlier in the including China’s $299bn National by region, 2018 v 2019 v 2020. Region scores (weighted by AUM) region, scoring 76 in the index, up from Social Security Fund, have no women in last year’s 42. topmost positions. NORTH AMERICA ▼ Europe’s score also improves, mainly Latin America maintains its score of due to Norway’s Government Pension 14. The top scoring fund in the region, 2020: 42 2019: 45 Fund Global, the world’s largest Trinidad and Tobago’s Heritage and 2018: 43 sovereign fund. The region earns 37 Stabilisation Fund, is second in the index EUROPE ▲ points on the index, a 28% increase from overall. Its management and board have last year’s 29. The GPFG is managed by more women than men, a rarity in the 2020: 37 Norges Bank Investment Management, index. The fund’s score increases to 92 2019: 29 2018: 18 guided by the Norges Bank’s executive from 80 last year after one of its female board. Nina Hammerstad was appointed senior advisers left, improving the AFRICA ▼ NBIM’s chief people and operations gender balance in favour of men. 2020: 19 officer. Benedicte Schilbred Fasmer Once among the best performers 2019: 45 2018: 43 and Nina Udnes Tronstad were also in the index, Africa’s sovereign fund appointed members of the Norges Bank score plunges to 19 from 45 last year. ASIA PACIFIC ▲ executive board at the start of 2020. Two Acting CEO Matshepo More of South 2020: 18 women joined the management of Italy’s Africa’s Public Investment Corporation 2019: 16 Cassa Depositi e Prestiti. Alessandra was suspended over a controversial 2018: 16 Ferone was appointed chief risk officer, transaction made in 2017 when she was LATIN AMERICA CARIBBEAN ▼ while Manuela Sabbatini was named chief financial officer. She was replaced 2020: 14 chief audit officer. CDP is the third by Vuyani Hako. Combined with other 2019: 14 largest sovereign fund in Europe. changes in the management structure, 2018: 10 North America is the best-scoring PIC’s score drops to 26 from 67, pulling MIDDLE EAST* ▲ region, despite a small decline to 42 down Africa’s score along with it. 2020: 5 from 45. Its second-biggest fund, the 2019: 2 Alaska Permanent Fund Corporation, Modern, responsible investment 2018: 1 lost its female chief operations officer Across the index, only 14 sovereign GLOBAL ▲ and has yet to name a replacement. funds remain without any women, 2020: 19 Two women joined its board, but since an improvement from 19 in 2019. 2019: 17 the index assigns lower weights to Recent experience in the private sector 2018: 13 non-executive positions, this was not indicates that highlighting this lack of enough to make up for the change diversity could help encourage female Source: OMFIF analysis in management. The APFC’s score appointments. As of 2019, all S&P 500 decreases to 72 from 82, although it companies have at least one woman on new chair Mariam Al Aqueel, who holds remains one of the best examples of their boards, a significant improvement the position as an extension of her role gender diversity in leadership, ranking from seven years prior when one in eight as finance minister. She is the first fifth overall. companies were all-male. woman in Kuwait and the Gulf region North America and Europe are the To be genuinely responsible owners, to occupy this post. In 2019, she was only regions where each fund considered sovereign funds need to look at gender named Arab Woman of the Year for has at least one woman in a senior role, diversity within their own ranks. As it Achievement in Economic Development partly explaining why they perform well is, they are losing out on female talent & Leadership. KIA is the world’s fourth on the index. and potential gains from more diverse largest sovereign fund and changes Asia Pacific shows modest decision-making. A truly modern and in its leadership consequently have a improvement, with its score moving responsible fund would take gender pronounced impact on the index. only slightly to 18 from 16. The Korea balance seriously. ◆ Two women joined Bahrain’s Investment Corporation’s previously KAT USITA, Deputy Head of Research Mumtalakat. Rania Al Shirawi and all-male board welcomed two women, at OMFIF. Research assistance provided by Marwa Al Saad were appointed vice- Eunsook Seo and Okee Choon. However, Brandon Chye, Economist at OMFIF. 30 GENDER BALANCE INDEX 2020

Dismantling an old bias with new rules ISABELLE Female-founded startups struggle to raise as much funding as their male BÉBÉAR Head, counterparts. Several investment funds are taking action. International and European Aff airs, Banque ACCORDING to a 2018 study by the Boston between Women and Men confi rms: ‘In the absence Publique Consulting Group and Sista, a collective of female of fi rm legal constraints, co-option strategies d’Investissement entrepreneurs advocating for more investment between men are perpetuated and the sharing of in women-led companies, startups founded by responsibilities stops at the gates of power.’ women are 30% less likely to receive funding than There are several actions investors can take. male-owned businesses. Just 5% of the money that They can recruit more women, particularly for French venture capital funds allocate each year to management positions. When allocating funds, innovative startups goes to female entrepreneurs. they should be mindful not to consciously or And yet female-founded or co-founded startups unconsciously disadvantage female-led companies. yield more than double the returns of their male Bpifrance is a signatory of the best practice counterparts. charter drawn up by Sista and the Conseil national The solution to this problem starts from du numérique, the French digital council. It childhood. Parents should raise their daughters contains a set of guidelines to help investment to become ambitious, self-confi dent women who funds design recruitment and investment processes trust in their ability to be enterprising and shine that foster gender diversity. Per the charter, in the spotlight. And they must teach their sons by 2025, 25% of all funded startups should be that women, too, can be leaders. This requires close founded or co-founded by women. Signatories have attention; our education and culture infl uence our committed to examine the deal fl ow and measure actions, sometimes in a way that is unconsciously the gender balance in their portfolio. They will also counterproductive to the goal of equality. adopt more inclusive recruitment and investment Schools, from early childhood to higher practices. Finally, they will spread best practice education, must adapt their teaching methods to throughout the fi nancial sector. their pupils. All children are diff erent, but that is no Bpifrance is leading by example and applying excuse to question their equal capacity to succeed. these principles to all of its investment activities, It is important for women to serve as role both direct and indirect. ◆ models and share their experiences with younger ‘There are generations and encourage them to overcome several actions the limitations they may impose on themselves. investors can We must, however, be open and honest about the take. They sexism women face at work. Female solidarity can recruit can help, and several professional networks are more women, carrying out remarkable action to promote parity. particularly for These include the International Women’s Forum, management whose members work to advance gender equality positions. When and diversity. allocating funds, they should be Investor commitments mindful not to In this regard, gender quotas have helped increase consciously or the number of women on boards at French unconsciously companies. Since 2011, French law requires French- disadvantage listed companies to allocate at least 40% of seats female-led on their boards to women. A report published in companies.’ February 2017 by the High Council for Equality GENDER BALANCE INDEX 2020 OMFIF.ORG 31

Harnessing investor power

Investment managers are well-placed to foster diversity in the fi nancial

TAMARA sector, by applying a gender lens to their decision-making and engaging SINGH with fi rms that demonstrate a commitment to inclusion. Founder, W3 CDD and Adviser, Include BY 1 July, Goldman Sachs will underwrite initial two years. The appointment of those women was Consulting public off erings of European or US companies only seen as suggestive of a firm’s preference towards if they have at least one diverse board member. goals other than increasing short-term returns This requirement will rise to two in 2021. To to shareholders, for which the firm was then support the change this will hopefully bring, temporarily penalised. The sentiment relating to Goldman Sachs will provide access to its network the primacy of shareholder value may be shifting of board-ready candidates. This is an example towards a more stakeholder-oriented perspective. of concrete action the investing community can However, until this change occurs, a bias in the adopt to foster gender inclusion and diversity. markets may exist that presents an opportunity. Plenty of research indicates that organisations Investment firm Calvert Impact Capital issued with diversity programmes perform better. a report outlining their journey towards gender- Investment managers are well-placed to catalyse lens investing. It highlighted the importance of the shift towards more effective and sustainable defining the nature of the capital to be invested, business models. and of understanding the level of influence that One way they can promote inclusion is in the capital may bring. exercising their voting rights. A 2019 survey by This allows the company to deploy its capital Boston Common Asset Managers, in collaboration where it is most impactful. To take constructive with the Thirty Percent Coalition, found that 75% action, says the report, a firm should engage with of respondents had a public proxy voting policy. portfolio companies and start the conversation Cost sensitivity had previously disincentivised within their own organisations. passive investors from engaging actively in The Global Impact Investing Network corporate governance matters. Collective recommends that firms consider gender from engagement providers and proxy voting advisory pre-investment through to post-deal. Investors services like Glass Lewis and Institutional can send a powerful signal simply by including Shareholder Services offer an accessible means gender considerations throughout their processes of determining companies’ inclusion credentials. and requesting information relating to diversity To illustrate the potential impact of the passive initiatives when conducting due diligence. investing community: the collective voting Trillium Asset Management, for example, requires ‘Investors can power of the three largest exchange traded fund companies to provide data relating to the diversity send a powerful providers was estimated to be 15% of the S&P 500 of their current executive leadership and their signal simply in 2017. plans to develop balance. by including A more involved action would be seeking As BlackRock Chief Executive Officer Larry gender to invest in companies that advance women’s Fink said in his letter to CEOs on the firm’s considerations leadership. This entails conducting due diligence, commitment to climate change, ‘Awareness is throughout which could incur additional costs. However, long- rapidly changing, and I believe we are on the edge their processes term investors should consider the opportunities of a fundamental reshaping of finance. In the near and requesting that appointing female leaders present. future – and sooner than most anticipate – there information will be a significant reallocation of capital.’ relating to Beyond shareholder primacy The two-year penalty to firms appointing diversity Beyond the impact on a company’s performance, women to their boards may shift soon. Firms that initiatives when a study in academic journal Organisation Science lack diversity in board and management may see conducting due found that companies that appointed women to themselves suffer a ‘groupthink’ discount. There diligence.’ their boards saw a decline in market value for is no excuse for investors any longer. ◆ 32 PENSION FUND FINDINGS

+12% Europe’s score rises to 46.3 Pensions show promise from 41.3 In fulfilling their mandate to grow their members’ savings ahead of retirement, pension funds can promote gender balance through their investment choices.

PENSION funds have a clear, straightforward mandate to safeguard Gender Balance Index score, top 20 pension funds 2020 and grow their members’ savings ahead of retirement. In doing so, they have an opportunity to promote gender balance Rank Score AUM $bn through their investment choices and the policies they set for their members. 1 Pensionskassen For Sygeplejersker 100 ▲ 20.55 They may be more likely to achieve this if they are led by a diverse set of decision- 2 Nilgosc 97 ▲ 10.08 makers. European public pension funds show 3 Cayman Islands Public Service Pensions Board 95 ▲ 0.84 promising gains in the gender diversity of their own management teams and 3 AP6 95 ▲ 4.02 boards. They score 46.3 on the GBI, up 12% from last year’s 41.3. Among the 5 PKH 94 ▲ 3.06 three institution types covered by the index, they have the highest score and 6 London Borough of Redbridge Pension Fund 93 ▼ 1.03 show the best improvement. More women are leading pension 7 Tyne and Wear Pensions Fund 92 ◀ 11.06 funds in Europe. There are 36 female chief executive officers, compared to last 8 Caisse de Prévoyance des Fonctionnaires de Police 92 ▲ 1.75 year’s 31, out of 191 funds. Two of the new female CEOs are in Sweden, bringing up 9 AP7 91 ◀ 94.70 its country total to four. Katarina Staaf was appointed managing director of AP6, 9 Pension Fund for Nurses and State Employees 91 ▲ 7.58 ranked third and the highest scoring Swedish fund in the index. Teresa Isele is 11 Turks and Caicos Islands National Insurance Board 88 ▼ 0.21 acting CEO and general counsel of AP1. Despite these developments, Sweden 12 London Borough of Tower Hamlets Pension Fund 86 ▲ 1.98 slides to third place from second, with its country score declining to 68 from 13 Strathclyde Pension Fund 85 ▲ 27.78 83 last year. AP1 and AP3 lose points for 14 Folketrygdfondet 80 31.92 having more women than men in both ▲ management and board positions. 14 Guernsey Superannuation Fund 80 ◀ 1.74 Pensionskassen for Sygeplejersker og Lægesekretærer, Denmark’s pension 16 London Borough of Enfield Pension Fund 79 ▲ 1.47 fund for state-registered nurses and medical secretaries, scores a perfect 100. 17 Isle of Wight Council Pension Fund 75 ▲ 0.76 It is managed by pensions administrator PKA under the direction of its board. 18 Ircantec 73 ▼ 11.03 Annegrete Birck Jakobsen is the only female executive director, but the nine 19 Pensionskasse der Stadt Winterthur 71 ▼ 2.01 women on the 11-person board boost the fund’s score. 19 Stichting Pensioenfonds ABP 71 ▲ 494.84 Among the 19 countries covered by the index, Iceland regains the top spot with a score of 91 after losing Source: OMFIF analysis, institutional annual reports first place to Norway in 2019. Harpa GENDER BALANCE INDEX 2020 OMFIF.ORG 33

Pension funds gender balance index score by country, 2018 v 2019 v 2020, %. Country scores (weighted against AUM)

2020: 91 Iceland 2019: 68 2018: 90

Jónsdóttir was appointed managing have every reason to push for diversity. Norway 2020: 81 director of Lífeyrissjóður starfsmanna Sweden’s AP2 has its own index 2019: 88 ríkisins, Iceland’s pension fund for state measuring female representation in the employees, driving up its score to 91 Nasdaq Stockholm. Australia’s Hesta 2020: 68 Sweden 2019: 83 from 68 last year. This is the second Super Fund encourages companies on 2018: 76 time that Jónsdóttir has formed part of the ASX to set gender targets. Some 2020: 63 a top-scoring institution in the index. American pension funds, including the Netherl. 2019: 48 2018: 49 Before joining LSR, she was director of state funds of Connecticut, Minnesota the Central Bank of Iceland’s financial and Oregon, are calling on companies to 2020: 61 Ireland 2019: 70 stability division. The central bank disclose gender pay gaps. 2018: 70 topped the index in 2019 and now Responsibility over their members’ occupies third place. retirement income demands that Bos. and 2020: 56 Herz. 2019: 63 pension funds consider the existence 2018: 24 Consistent countries of the gender gap in pensions. The 2020: 48 The two highest scorers, Iceland and disadvantage women face throughout Poland 2019: 52 2018: 46 Norway, have consistently dominated their careers becomes more pronounced the GBI for pension funds since 2018. upon retirement, with women receiving 2020: 43 Notably, both countries are also the two Finland 2019: 37 around 40% pension income less than 2018: 43 most gender-equal countries in the world, men on average. Women also live longer, based on the World Economic Forum’s 2020: 37 which means they are more at risk of Denmark 2019: 40 Global Gender Gap Report 2020. Gender falling into poverty late in life. 2018: 38 quotas for corporate boards have long Pension funds are not liable for 2020: 37 been in place in both. the gap, but they can be part of UK 2019: 35 2018: 28 While Nordic countries tend to perform narrowing it by devising policies well on the index, western European that improve women’s ability to build 2020: 35 countries do poorly. Luxembourg, Switz. 2019: 30 up contributions throughout their 2018: 26 Germany, Portugal and Austria are at the lifetimes. In the UK, for example, bottom of the index, with Liechtenstein, 2020: 33 a greater share of women entered Turkey 2019: 18 Spain and France just slightly ahead. workplace pension schemes after the 2018: 9 Each of these countries were also in the government rolled out an automatic 2020: 29 bottom half of last year’s index. enrolment system in 2012. For smaller France 2019: 20 2018: 5 The Cayman Islands holds the pension funds, implementing similar distinction of being the only jurisdiction policies may require working with 2020: 29 covered by the GBI where more than one Spain 2019: 29 other funds, industry stakeholders and 2018: 50 type of institution is headed by a woman, national government bodies to develop in this case both a pension fund and 2020: 26 standard practices. Liechten. 2019: 26 central bank. The Public Service Pensions Pension funds can have a significant Board is led by managing director Jewel impact on gender balance in business 2020: 13 Evans Lindsey, while Cindy Scotland and industry by promoting female Austria 2019: 13 2018: 15 heads the Cayman Islands Monetary inclusion in corporations. They are also Authority. Both institutions perform well ideally placed to influence national 2020: 13 on the GBI. The pension board scores 95 Portugal 2019: 14 legislation and administrative policies 2018: 32 and is tied with Sweden’s AP6 for third, that affect gender equity and women’s while CIMA scores 84 and ranks seventh. 2020: 7 welfare. Doing so would be aligned with Germany 2019: 6 For pension funds, the PSPB’s score forms upholding the interest of the public they 2018: 7 part of the UK’s country score. serve. ◆ 2020: 5 Luxem. Balance in and out 2019: 5 KAT USITA, Deputy Head of Research 2018: 4 As responsible investors with a fiduciary at OMFIF. Research assistance provided by Source: OMFIF analysis duty to their members, pension funds Chris Papadopoullos, Economist at OMFIF. 34 GENDER BALANCE INDEX 2020

The key to a healthy bottom line DEBBY Research shows diversity leads to improved long-term performance. It is BLAKEY Chief Executive an issue the fi nancial sector can no longer aff ord to ignore. Offi cer, Hesta Superfund THE MORE time I spend in boardrooms and executive are women. Australia’s government body leadership discussions, the more I experience for gender equality gives us its highest endorsement the tangible benefi ts of diversity. Through my as an employer of choice and we work exhaustively experiences in senior management in fi nancial to ensure we have no gender pay gap. services and as chief executive offi cer of an There is much to do to improve gender diversity Australian profi t-to-member superannuation fund, in Australia. Last year, only 12 chief executive there is no doubt that diverse boardrooms and officers in the ASX 200 were women. We are firmly diversity in business leadership are vital for positive committed to ensuring boards have a minimum of business and social outcomes. 30% women directors. We have engaged with all Organisations are realising more than ever the ASX 200 companies, calling for them to set clear value of prioritising diversity and equality. Not targets – with timeframes – for the number of just for their employees, but because it impacts women in their senior executive ranks. the long-term performance of their businesses. We have also surveyed 70 of our Australian and Diversity and inclusion lead to better decision- international investment managers on gender making and stronger performance. They give us diversity across a range of roles in their businesses. a competitive edge as a fund, helping attract top We believe diversity is an accurate indicator of a talent. well-run company, more likely to deliver strong Gender diversity sits at the heart of decision- performance results. And we want to encourage making across every area of our business. This this diversity benefit in our investment partners. approach spans our actions as an employer, The steps we have taken are about opening a and throughout our supply chain, including our dialogue with our investment partners to better external investment managers and the companies understand their approach to gender diversity. We in which we invest. want to look at their initiatives to improve gender This benefits our members, 80% of whom are diversity and how they champion this in their women, either through enhanced returns, lower teams. We also plan to share ideas and case studies fees or improved products and services. Our and find out what’s working for them. And together, mission is to make a real difference to the financial we will share these learnings with the broader future of every member. funds management industry. Gender equality isn’t a corporate fad; it is an Real impacts issue the financial sector can’t afford to ignore. The ‘Last year, For many Australian women and Health view that there aren’t enough capable women to fill only 12 chief Employees Superannuation Trust Australia board positions and senior leadership roles must be executive members, the government age pension will be challenged, and companies should take measurable offi cers in the their main source of retirement income. Improving action to achieve change. Diversity needs to ASX 200 were gender equality has real impacts on their future, shift from the corporate social responsibility women. We whether that is through more opportunities and plan to be a fundamental part of a business’s are fi rmly choice at work or more money in their retirement strategy, underpinning strong governance, talent committed account. identification and culture. Research shows the to ensuring It’s important as an organisation we live the result will be better long-term performance and boards have a change we want to see. We aim to have equal stronger returns for shareholders. ◆ minimum of representation of women on our trustee board. 30% women More than half its members are women, including directors.’ our independent chair, and half of our senior GENDER BALANCE INDEX 2020 OMFIF.ORG 35

The other pay gap Beyond the gender pay gap, women are at a disadvantage when it comes to

EVE READ their pension. However, there are ways pension schemes can help bridge Director, this divide. Nest Corporation

ACCORDING to a European Parliament study, the Improving fi nancial understanding through gap between the pension of the average man and education can have positive outcomes – namely woman across Europe is 40%. Yet the gender pay helping women to understand the challenges that gap is ‘only’ 16%. might be specifi c to them and building confi dence An individual’s pension is generally a function of around fi nancial decision-making. Unfortunately, income, years of paid work, percentage of income many studies prove that traditional forms of invested, investment growth and the impact of any fi nancial education do not create behavioural pre-retirement balance withdrawals. Additional change. factors of retirement age and longevity will impact However, there are ways to ensure education is whether, in combination with any state provision, more impactful. One solution is using language total savings provide an adequate pension in that does not exclude a female audience. retirement. Almost all these factors disadvantage Technology can help improve the impact of women. communications through personalisation and It is not just the disparity between male and timing to coincide with life events. Another way is female average hourly pay that impacts income, implementing good practices like the removal of all but also the number of hours of paid work pension jargon from communications. undertaken. In all of the 34 Organisation for Economic Development and Co-operation member Targeting equality in pensions countries, more men than women work full-time. Given the complexity of pensions, the present Across the European Union and the UK, 8.7% of state of fi nancial literacy and the importance of men work part-time, compared with 31.3% of decision-making, pension schemes should, where women. Even without an hourly pay gap, this possible, make decisions on behalf of their members diff erence in working hours would produce a lower that they believe to be in their best interests. annual retirement income for the average female. Pension funds can, for example, implement an Cumulatively the impact is signifi cant. investment strategy which takes appropriate In many cultures, women continue to take levels of investment risk at specifi c stages of life, the leading role in caring for family – not just or automatically escalate contributions to higher the young but increasingly the old too (even for levels. a partner’s family members) – which limits the Pension schemes cannot create equality in number of years during which they can participate pension systems without collaboration. Working ‘Improving fi nancial actively in the paid workforce. with industry bodies, pension schemes are well understanding Investment growth does not impact an placed to identify existing issues and infl uence through education individual’s fi rst pillar state pension provision or policy-makers for change. Pensions schemes should can have positive defi ned benefi t plan, but for the predominant form seek to remove structural barriers, particularly outcomes – namely of defi ned contribution or private pension plans, those that limit access to pension provision. helping women to investment growth impacts greatly the size of an They should ensure continued rights to pension understand the individual’s pension pot at retirement. accumulation throughout periods of caring leave, challenges that Women tend towards higher risk aversion than as well as the ability to overpay without tax might be specifi c to men, leading them to take lower growth strategies. implications before or after extended leave. And them and building This may in part be driven by a desire to protect they should work towards greater equality in family confi dence around their lower starting balances, but it may also caring leave, and pay parity both across full-time fi nancial decision- show how fi nancial confi dence and understanding and part-time hourly rates. ◆ making.’ infl uence risk-taking. Dialogue on World Finance and Economic Policy The Official Monetary and Financial Institutions Forum is an independent forum for central banking, economic policy and public investment — a neutral platform for best practice in worldwide public- private sector exchanges. For more information visit omfif.org or email [email protected]

AUTHORS: Danae Kyriakopoulou, Chief Economist & Director of Research Kat Usita, Deputy Head of Research

RESEARCH ASSISTANCE: Afroditi Argyropoulou, Brandon Chye and Chris Papadopoullos

PRODUCTION: Simon Hadley, Director, Production William Coningsby-Brown, Assistant Production Editor Julie Levy-Abegnoli, Subeditor Fergus McKeown, Subeditor

COVER ILLUSTRATION: Nick Lowndes

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Company Number: 7032533. ISSN: 2398-4236