On Board with More Women in Leadership

IMF Blog, March 3, 2020

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Where are all the women? The piece frames the question as urgent in 2020 and ties it to International Women’s Day and the 100th anniversary of women getting the vote in the United States.
IMF staff research across perspectives shows economic benefits of promoting gender equality policies.
Core message: more women in the workforce and in more senior positions is good for women, businesses, and countries’ economies.

The average workforce participation rate for women globally sits 20 percentage points lower than the male rate.
On average across countries, women have just three-fourths of the legal rights—such as owning property, receiving an inheritance, or opening a bank account—afforded to men.
Even though five advanced economies have a gender gap of 5 percentage points or lower, the average gap for advanced economies remains at 10 percentage points.
These imbalances impose costs in the form of lower productivity and forgone economic growth and reduce women’s economic empowerment and leadership opportunities.

Women are missing at all levels of the financial system, from depositors and borrowers to bank board members and regulators.
Women account for less than two percent of financial institutions’ chief executive officers and less than 20 percent of executive board members.
IMF staff findings:
- Banks with higher shares of women board members had higher capital buffers, a lower proportion of nonperforming loans, and greater resistance to financial stress.
- A similar positive relationship exists between bank stability and the presence of women on banking regulatory boards.
- In a study of two million firms in 34 countries in Europe, greater gender diversity in senior positions was associated with higher profitability of firms; specifically, one more woman in senior management or on a corporate board is associated with 8–13 basis points higher return on assets.
Interpretation: greater diversity of views on boards broadens perspectives, improves quality of decision making and discussion, and leads to better outcomes for businesses.

Globally, just 18 percent of firms are led by women.
On average, only 22 percent of board members in OECD countries are women.
Examples of lower representation in emerging economies: India at 13 percent, Brazil at 8 percent.
Progress has been slow.

At the IMF:
- Over 30 percent of staff in senior management are women.
- 35 percent of department directors are women.
Female representation on the Executive Board over the past 14 years has increased overall in advisor and senior advisor positions, but the share of female executive directors has hovered around 4–9 percent.
Currently:
- Women hold three out of 24 executive director positions.
- Women hold three of 30 alternate executive director positions.
- Total representation at 9 percent for 2019.
Rationale: more women on the IMF’s executive board brings more diverse views to tackle global challenges—such as climate change, inequality, and social inclusion—and can enhance institutional performance and effectiveness.
Prior studies cited: companies that invest more in gender diversity tend to receive higher dividends on organizational excellence—including through leadership, direction, accountability, and values—relative to non-diverse companies.

Raise awareness with member-country governments on the importance of considering—and selecting—more women to be nominated as Executive and Alternate Executive Directors.
Consider how the Fund, as an institution, could reduce barriers to gender diversity at the Board.
Provide networking opportunities for female staff to meet and share experiences to informally mentor others during their tenure at the IMF.
Call to action: including women in the global economy requires action; the IMF intends to push harder and do more so that the answer to “Where are all the women?” becomes “in the boardroom.”

Source: On Board with More Women in Leadership (IMF blog), Kristalina Georgieva, Louise Levonian, March 3, 2020.