More and more women occupy board positions in the banking industry and play a pivotal role in making banks comply with regulations and rules. They are better at the details, some argue. By Albert W Nonto
Christine Lagarde, the managing director of the International Monetary Fund (IMF), believes that more women at the top of leading financial institutions could help to avoid future market crises. She also warns that the current dearth of women in financial institutions needs to be addressed and that financial stability might be improved as a result.
“IMF studies have shown significant macroeconomic gains when women are able to participate more fully in the labor market,” she said recently. And, she added, the studies support her argument that women in leadership positions at financial institutions would help promote good governance. Women in such positions improve inclusiveness and help to clearly define what women really need to improve their economic life.
Research by GlobeAsia on the boards of banks in 2015 found that women continued to be under-represented.
She pointed out that women are under-represented in finance with less than 20% of bank board positions filled by women, and just 3% of bank CEO positions. “Clearly, we need to do better,” said Lagarde, adding that increasing financial inclusion might improve the “culture” of the financial sector to better “align financial incentives with social objectives.”
In Washington last year at a general meeting of the IMF, Lagarde raised a similar question to one she posed in 2010. Referring to the financial institution that played a major role in creating the crash of 2008, she asked “What would have happened if Lehman Brothers had been Lehman Sisters?”
Lagarde states that 40% of women across the world lack access to financial institutions, compared to 35% of their male counterparts. She encourages women to take part in financial inclusion programs to empower them economically.
Research by GlobeAsia on the boards of banks in 2015 found that women continued to be under-represented. The largest bank, Bank Mandiri, has only one woman on its board of directors. The position is slightly better at the biggest private bank, Bank Central Asia, with two women sitting in directors’ chairs. Bank CIMB Niaga is impressive, with six female directors out of 10.
Only one bank has a female president director. Parwati Surjaudaya has occupied the position at OCBC NISP for more than five years and two more women sit on its board of directors with her (see table). And yet while the situation remains heavily weighted in favor of men, the good news is that the number of women in top positions at the top 15 banks by assets is improving.
Parwati on many occasions has said that her bank is going “back to basics” as a bank strongly committed to funding for small and medium enterprises (SME), where more women play a role than in big companies. She believes women are better at attending to details than their male counterparts. It’s one area where women perform better than men, she argues.
Ivy Kamadjaja, a director at family-owned Kamadjaja Logistic, agrees there are differences in the way women lead. “Women leaders can see some things from a different angle, and to some extent they are more responsive and sensitive to any kind of problems and challenges, especially some things that women need,” she adds.