IMF's Lagarde is nobody's token; causes and effects of gender pay disparity
Taking a stand: Christine Lagarde, the head of the International Monetary Fund, refuses to attend any meetings in which she would be the only woman. Lagarde, who is the first female managing director at the IMF, disclosed that detail this week at the seventh annual Forbes Women’s Summit, drawing robust applause from the rest of the women in the room.
After years of learning how to be a leader in rooms full of men, Lagarde said her new commitment to stop being the only one is her way of enabling more women to enter those spaces, thus bridging the gender gap. She encouraged others to do the same. “Make sure it’s not just about you, but that there are other, younger women that are also coming up the ranks, so that the day when you stop, they are there to also make space for others. That’s my very strong wish,” she said.
When Lagarde rose to the top of IMF (she is currently in her second term), she said, she pushed for more research and analytical work in order to identify policies like tax rules, public spending and structural reforms that could help women. She brought up an IMF joint study with the World Bank, which showed that 79% of the 189 countries that are members of the two organizations have discrimination against women in their legal frameworks. These include prohibitions against inheritances from their parents, lacking rights to land titles and an inability to produce collateral should they want to borrow money.
While she found many of the steps toward closing gender and wage gaps for women depend on how developed the economy and society is within a given country, Lagarde says they also depend on women. “I don’t think that we should be resigned to it. I don’t think that we should be aggressive about it. But I think we should be just steady at identifying, in whatever position we hold, where there is a gap, where there is discrimination, where there is a legal impediment,” she said, calling it a long-standing quest.
Lagarde also addressed how women’s equality is a benefit for all, not just women. She said women’s equality has shown to grow the economy, improve productivity and bring stability within countries that acknowledge it. Still, there are currently only six countries that have no legal discriminations between men and women. Despite this, the IMF leader sees opportunity in the disparity in the form of women helping women. “It doesn't make me sad or depressed, because I think that there is there is a lot of inner strength in the women’s movement,” she said.
Reinventing the bank: Judith Erwin thought she was done with banking after 35 years in the industry, until she was approached two years ago with the idea for a New York bank that would cater to startups. “I asked myself, if you could start a bank from scratch, what would that look like and what problems could you solve,” she said. “It turned out to be quite a long list.” That's what drove Erwin to head up what became known as Grasshopper Bank, which bills itself as a "digital-first bank for the digital entrepreneur.” Erwin sat down for an extended Q&A with American Banker to discuss account opening, wire transfers, cash-flow management and other services that she thinks traditional banks could improve on. She also discussed the institution's unusual name.
Who's meeting with the new CFPB chief? Kathy Kraninger is something of an enigma to the banking industry. Before taking the job as the director of the Consumer Financial Protection Bureau, she had no banking or consumer protection experience, having most recently serveds a deputy at the Office of Management and Budget. But in a detailed look at Kraninger's public calendar in the first four and a half months in the job, American Banker discovered that she was far more likely to talk to lawmakers (from both political parties) than her predecessor, Richard Cordray, was. But she also made a clear effort to reach out to other stakeholders, including bank CEOs and consumer groups alike. Kraninger met with 13 individual bankers, five more than Cordray during a similar time frame, and those included meetings with interim Wells Fargo CEO C. Allen Parker. She also met with U.S. Bank CEO Andy Cecere, American Express CEO Stephen Squeri, TD Bank USA CEO Gregory Baca and PNC Financial Services Group CEO Bill Demchak.
The blame for gender pay disparities: Sallie Krawcheck, the CEO of Ellevest, the startup aimed at digital investing for women, said "society" is the culprit, according to a recent interview with The New York Times. Krawcheck argues that men are taught early to be aggressive investors, while women are trained to be more cautious. "The disparity in messaging is one factor contributing to the deep gender bias on Wall Street, where women are underrepresented in boardrooms and the pay for female employees lags behind that of their male counterparts," the Times article says. But Krawcheck has advice for women seeking to change the dynamic. In the same discussion, the Times also talks with Stephanie Cohen, chief strategy officer at Goldman Sachs, and one of American Banker's Most Powerful Women in Finance. “We have a lot of work to do,” Cohen told the paper, speaking of Wall Street and Goldman's efforts to ensure pay parity. "And we know we're not going fast enough."
What makes a good leader? In a related article, the Times says that for a long time, "women were taught to 'act like men' to get ahead at work." But that's changing. "A new brand of women leaders ... is upending those old rules, embracing traits like empathy and collaboration to get things done, and refusing to suppress the qualities that make them who they are." The paper also looks into why Republicans are having so much difficulty in increasing the number of women in their congressional ranks.
Warren is the new Adlai Stevenson? Speaking of women in Congress, a Wall Street Journal op-ed takes a look at recent momentum by Sen. Elizabeth Warren, D-Mass., in her presidential run. That rise has been fueled in part by her willingness to detail her plans on virtually every subject, from housing to student debt to health care and climate change. But the author of the article, Jason L. Riley, argues that Warren's wonkiness may also prove to be a weakness.
Banning stereotypes: The U.K. has taken the unusual step of prohibiting commercials that portray gender stereotypes. These include ads with wafer-thin models in bikinis asking women if they are "beach body ready" and those that depict a man who is unable to change a diaper or relaxes while his spouse does all the housekeeping. "Put simply, we found that some portrayals in ads can, over time, play a part in limiting people’s potential,” Guy Parker, chief executive of the Advertising Standards Authority, said in a press release. “It’s in the interests of women and men, our economy and society that advertisers steer clear of these outdated portrayals.”
Now hear this: "I’m really proud, but I also think it’s absolutely pathetic." So begins The New York Times' profile of Marin Alsop, the first woman to lead a major American orchestra, the Baltimore Symphony Orchestra. Alsop acknowledges the long struggle to get to that position, and the frustration that the barrier had not been broken long ago. She is trying to change the perception of women conductors while also opening up opportunities for underserved families to experience and enjoy classical music.
A climber and a mother: In a moving op-ed, Beth Rodden discusses her fears that her career as a professional climber might have been over when she told her sponsors she was pregnant. "For a female climber, starting a family was widely seen as not only a career killer, but also a lifestyle-destroying choice," she said. "I was braced for a hard fall. Instead, they blew my mind. They said they would support me through pregnancy and into my new journey as a mother." Rodden talks about advice for other professional athletes thinking of starting a family. "Find a sponsor who will support you. Almost all the brands who sponsor elite athletes sell the vast majority of their merchandise to people who don’t climb or run or ski for work. They sell to people who have full lives. If they sell to women, they sell to mothers."
Rob Blackwell contributed to this article.
Thanks for reading! If you'd like to get on the email list for this newsletter, please go to our Women in Banking homepage to sign up.