New measures by the European Central Bank aim to improve gender diversity

American entrepreneur, Malcolm Forbes, once described diversity as “the art of thinking independently together”. Today, diversity is beginning to emerge as a quintessential workforce norm and institutions have started to acknowledge the differences in their staff compositions that are deeply ingrained in the fabric of their organisational culture. With many challenges remaining, the independent think tank for central banking, OMFIF, has published its most recent report sponsored by Mazars to embark upon the challenge of instilling diversity measures in central banks^[1]. In particular, the report highlights cultural, economic, social and psychological barriers which impede the economic and professional empowerment of women.

Incorporating findings from a survey of 46 central banks and two multilateral organisations, the report shows that gender balance in central banks has seen improvements for a second consecutive year. However, the global score remains disappointing at 27.5, with a score of 100 representing perfect balance. So while central banks around the world are acknowledging the importance of fostering a more inclusive culture, only marginal improvements can be observed for women in senior positions. The challenge is, therefore, to empower women within decision-making roles to ensure an adequate level of representation.

Read more: Gender Balance Index 2020: Driving diversity

Addressing this challenge, on 14 May 2020, the European Central Bank (ECB or “the Bank”) announced a series of new measures to improve gender-balance for its staff at all levels^[2]. One of the ECB’s measures consists of defining target percentages on the number of women appointed to new and open positions. This measure also extends to targets on the overall proportion of female staff. The ECB’s strategy covers the period up to 2026, which falls within the mandate of President Christine Lagarde.

In addition, the ECB has set new targets beyond managerial roles to include Lead Expert, Expert and Analyst levels. The initiative aims to fill at least half of new and open positions with women across all levels, increasing the existing proportion of women between 40% and 51 % on aggregate by 2026. These targets are also accompanied by a range of other measures supporting gender diversity. The ECB announced that it would report on the progress of its programme by publishing interim assessments in 2022 and 2024.

This initiative is not the first programme targeting gender diversity launched by the Bank. The previous programme aimed to double the proportion of women in management positions for the period 2013 to 2019. As a result of that programme, the ECB exceeded one of its targets by achieving a figure of 30% of female senior managers by the end of 2019.  At the same time, the proportion of women in all management positions rose from 17% to 30%, which, while depicting a significant organisational change, was still below the desired target of 35%.

The programme introduced by the ECB not only aims to increase the percentage of women in its workforce but also sends a strong signal to other central banks to further improve their existing diversity and inclusion (D&I) measures. If executed appropriately, the programme will allow the Bank to build a more diverse boardroom which would prompt new ideas and experiences that help combat complex corporate issues.

Importantly, an organisation’s reputation is today assessed on multi-faceted levels. Be it an organisation’s Corporate Social Responsibility (CSR) programme or a diversity initiative, stakeholders are increasingly interested in the character of a firm. A diverse workforce is seen is a strong indicator of the behaviours and attitudes which persist within an organisation. Diversity acts as an emblem of acceptance and the ECB’s programme adheres to this principle.

With ever-evolving corporate norms, tangible efforts for diversity and inclusion are now inevitable in today’s corporate arena. But broader legal initiatives should be taken to end obsolete HR practices and the one-dimensional culture that we still observe in too many organisations. Indeed, the OMFIF report acknowledges that, while the progress on gender diversity made by central banks is heading in the right direction, the pace of change is slow.

The ECB has currently designated a female governor, but the global reality is that one in five central banks has no women in senior positions. President of the ECB, Christine Lagarde, reminds us “(…) that gender is one of the many dimensions of diversity that we must all value as we should mirror the society we serve.” She also expressed that the ECB would want gender balance to be the norm now, rather than a revolution to fight later.

By Aamir Khan and Pauline Pélissier.

^[1] https://www.omfif.org/gbi2020/

^[2] https://www.ecb.europa.eu/press/pr/date/2020/html/ecb.pr200514~94dbb7c109.en.html 3;\lsdp