Despite much work being done to improve diversity in financial institutions, there is still much more to do. According to think tank Official Monetary and Financial Institutions Forum’s (OMFIF) Gender Balance Index (GBI) 2022, just 46 institutions – or 14% – of the 335 central banks, public pension funds, sovereign funds and commercial banks analysed are run by women.
Yet all four groups have made progress in the past year and each improved their collective GBI scores. The index evaluates institutions based on gender balance among senior staff, weighted by seniority. Pension funds continue to have the most diverse senior teams, with a collective score of 47.9, whereas commercial banks make up the most improved sector rising to 35 from 29.9.
Central banks’ collective score has risen by 4.3 points to 31.3. While more women are running central banks than ever before, only 21 of the 185 that OMFIF tracks are female led. However, 2021 was a record year for female appointments. Out of 26 central banks that changed governors in the past year, six had women replacing men, of which three were in Latin America: Victoria Rodriguez Ceja, Banco de México; Rosanna Costa, Banco Central de Chile; and Rebeca Santos, Banco Central de Honduras.
Among central banks, the Federal Reserve Bank of San Francisco has topped the ranking with a score of 97. It moved up 16 places to take over the top spot. It is followed by Banque Centrale de Tunisie, which climbed two rungs to second spot with a score of 94. But it is Banco Central de Honduras which saw the biggest jump in rank – it leapt 126 positions to fourth position, mainly due to Ms Santos’s appointment.
According to the report, the global commercial banking sector has significantly improved the representation of women at its senior levels over the past 12 months. The combined score for the cohort of 50 leading global banks in 2022 has risen to 35 in the index, compared to 30 last year. Thirty-three commercial banks increased their score in 2022, while only 14 fell.
Royal Bank of Canada climbed 18 places to be crowned as the most gender-diverse global bank, doubling its score to 68. It is followed by Commonwealth Bank of Australia, which retains second position for a second year. South Africa’s Absa is the highest climber, rising 26 spots to third overall.
One of the interesting findings of OMFIF’s GBI 2021 research related to the nature of roles held by women on bank executive committees. It revealed that women were far more likely to hold roles that were administrative or internal-facing than their male counterparts, who were more likely to fill positions which allowed them to gain experience running a major business unit with profit and loss accountability. According to the report, “This matters because it is much more likely that an executive with experience running a major business division will join the ranks of the C-suite or even take over as CEO than someone who has run a function such as human resources or communications and marketing.”
Disappointingly, progress has been almost existent on this point. In 2022 just 38% of women on bank executive committees run administrative functions, down one percentage point on 2021. By contrast, only 17% of men on executive committees hold administrative roles.
Parity in job function is also an important area to address, in addition to closing the gender pay gap and building a strong pipeline of future female leaders. Much more work still needs to be done.
Joy Macknight is editor of The Banker. Follow her on Twitter @joymacknight
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