Boosting Growth Through Diversity in Financial Leadership

IMF News, April 13, 2019

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Remarks delivered by IMF First Deputy Managing Director David Lipton at an IMF/IFC Seminar on Gender Diversity Dividends in Finance, April 13, 2019.
Theme: macroeconomic, moral, and ethical implications of gender diversity in finance and the costs of exclusion and harassment.

Of the 1.7 billion people unbanked globally, nearly one billion of them are women.
Lower access to bank credit robs women of opportunities to educate their children, start businesses, or tide over hard times.
Across the world, fewer than 20 percent of bank and supervisory board members are women.
IMF Executive Board of 24 chairs currently had only 2 women, with a third female Executive Director expected in a few weeks.
Only 2 percent of bank CEOs worldwide are women.
Recent IMF research shows increasing financial inclusion, of both women and men, lifts economic growth.
Research shows having more women in leadership positions leads to greater financial stability, lower levels of non-performing loans, and higher profits.
Banks with a higher share of women on their boards were more stable in 2008, when the Global Financial Crisis hit.
A survey by the American Economic Association reported:
- A shockingly large number of women economists reported being victims of sexual assault.
- Nearly half of women economists said they avoid speaking at conferences for fear of harassment or “disrespectful treatment.”
- 70 percent felt that male colleagues’ work was taken more seriously than their own.
At the IMF, progress toward internal gender goals includes nearly reaching the 2020 goal of 30 percent of management positions filled by women—almost tripling the ratio from 10 years ago.

Conscious and unconscious bias: cultural, religious, and the tendency of men to hire people similar to themselves.
Women are often held to a higher standard of performance; women of color face even bigger obstacles.
Harassment and violence against women present an "ugly dimension" that imposes economic costs (health and services, reduced productivity, lost opportunities) and organizational harm.
Early-career and academic harassment discourages young women from entering or remaining in economics and finance, draining intellectual capital.

Greater diversity brings more diverse views, helps avoid group-think, and leads to better decision making.
Sexual harassment:
- Is criminal behavior in cases of assault.
- Cuts to the soul of institutions and must be confronted and stopped.
- Drives talented women away from the field, reducing the pool of future leaders.

Recognition of the #MeToo movement’s role in bringing harassment into the open.
Support for the American Economic Association’s sanctions against harassment and a call for every economist to take a stand.
Institutional progress at the IMF and World Bank noted, including female chief economists at both institutions.

Increase financial inclusion for both women and men to lift economic growth.
Promote gender diversity in leadership to enhance financial stability, reduce non-performing loans, and raise profitability.
Confront conscious and unconscious bias in hiring and promotion processes.
Implement and enforce robust measures to prevent and sanction sexual harassment and assault within institutions and professional settings.
Encourage mentoring, recruitment, and retention practices that expand the pipeline of qualified women leaders, including attention to the compounded barriers faced by women of color.

Empowering women in the global economy and expanding their presence in boardrooms supports economic and institutional health.
The fight for equality and dignity should begin within organizations and workplaces.

IMF Communications Department, Remarks by IMF First Deputy Managing Director David Lipton, April 13, 2019.