Annual Gender Equality Assessment 2019
In the world of finance, there are incremental yet measurable improvements in gender balance within senior positions of financial institutions, including central banks, sovereign wealth funds, and public pension funds. However, progress remains uneven and is challenged by structural barriers.
According to the annual Gender Balance Index (GBI), Asia has the lowest regional score at 9%, while Europe leads with a 38% score, a three-percentage-point improvement from the previous year. North America follows closely behind with a 36% score, an 11-percentage-point increase. The GBI studies gender diversity among senior staff of these financial institutions, weighting scores based on the size of institutions' corresponding economies and assets under management.
One of the key findings of the GBI report is the increasing female representation at senior levels. For instance, in financial institutions like those in Ireland, female participation has notably increased at senior management and executive levels. The Women in Finance Charter reports a 7.2 percentage point increase in female representation at senior management, a rise in female CEOs to 22.6%, and a 13.1 percentage point increase in board representation. This suggests that targeted gender balance programs and commitments can drive progress.
Industry-led initiatives are critical in advancing women into leadership roles. Programs like Ireland’s Women in Finance Charter highlight the effectiveness of concrete targets, mentoring, leadership development, sponsorship, succession planning, and flexible working policies. About 56% of firms have gender balance action plans, and 90% offer flexible work arrangements as key enablers.
However, despite these gains, barriers remain significant. Senior roles have low turnover, limiting advancement opportunities for women. Fewer female applicants for specialized roles in financial leadership, childcare availability and costs, and gender-neutral economic policies that fail to reflect women's realities in leadership or policymaking are among the challenges.
The importance of representation in economic policymaking is evident. Gender imbalance in central banks includes lower representation of women economists, which has repercussions for policymaking, such as neglecting gender-specific economic impacts. There is evidence that economic policies influenced predominantly by men may misdiagnose or mistreat issues that disproportionately affect women, indicating a need to integrate gender as a core analytical variable in such institutions.
The UN and World Bank emphasise the need for systemic approaches and whole-of-government strategies to advance gender equality, highlighting ongoing challenges in achieving SDG 5 (Gender Equality) and the need to increase women’s participation in decision-making roles globally, including economic leadership positions such as in central banks and funds.
Despite progress, there are still many areas for improvement. Out of 173 central banks globally, only 14 are headed by women. Thirty-five central banks have no women in senior positions. The GBI report does not provide specific data for the current year, and it does not provide details on the specific institutions that have improved or remained unchanged in terms of gender diversity since 2018.
In conclusion, while gender balance in senior roles in central banks, sovereign funds, and public pension funds is improving, progress is gradual and requires sustained commitment via structured targets, mentoring, flexible policies, and addressing systemic barriers like childcare and societal norms. Increasing women’s visibility in economic leadership is essential for equitable policy outcomes and inclusive economic growth worldwide.
- Public commitments to gender balance, such as those outlined in the Women in Finance Charter, have shown significant progress in increasing female representation in senior positions within the finance industry.
- However, the analysis of data from the GBI report indicates that the progress towards gender diversity remains uneven, with Asia having the lowest regional score and only 14 global central banks having female heads.
- Investment in AI and machine learning could potentially help in tackling the diversity issue in finance by providing unbiased recruitment and promotion strategies and by analyzing the impact of policies on both genders.
- To achieve the goal of SDG 5 (Gender Equality), a systemic approach to gender equality in finance, emphasizing whole-of-government strategies and increasing women's participation in decision-making roles, is crucial, especially in economic leadership positions like central banks and funds.
