Women rise to the top of EU financial regulators, but their boards lag behind – POLITICO

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On International Women’s Day, there is good news in at least one important indicator – a long-standing push by EU lawmakers for more women in top financial positions is paying off, with more women in leadership positions in EU financial regulators.

Women now lead two out of three European supervisory authorities: German regulator Verena Ross is chair of the European Securities and Markets Authority (ESMA), while Dutchwoman Petra Hielkema leads the European Insurance and Occupational Pensions Authority (EIOPA ).

The two women were appointed last year, not without difficulty. Ross’s candidacy has become bogged down in a months-long tussle between EU capitals over gender and nationality.

Hielkema’s nomination went smoothly, but EIOPA still had to initially relaunch its search for candidates due to a lack of gender balance on its shortlist.

ESMA is now led by a female duo at the top, with French regulator Natasha Cazenave in her No. 2 position as executive director. Seven of the 12 management positions at ESMA are held by women, according to its organizational chart.

However, the picture is more mixed with two other leading regulators. At EIOPA, only three out of nine leadership positions are held by women, according to her chart. At the European Banking Authority (EBA), on the other hand, its structure includes three women in seven management positions, with a team of two men at the head of the authority.

However, it is within the boards of directors that there is the greatest room for improvement.

EBA rebalancing

The EBA has tried to catch up after feeling the brunt of lawmakers’ anger over the gender.

EBA executive director Francois-Louis Michaud only narrowly won backing from the European Parliament to take on his role in 2020 after lawmakers previously rejected the candidacy of Irishman Gerry Cross.

During his hearing in Parliament, Michaud promised to double the share of women in management positions during his five-year term and to allocate a “substantial part” of the EBA’s human resources budget to help the female staff to pursue their careers.

Michaud told POLITICO in an interview that he’s been working toward those goals, increasing the number of female directors from one in four to three out of five since taking office 18 months ago.

To attract more women to leadership roles, job postings now include clear commitments to gender balance and reference flexible working arrangements – which have also become more common within the company. authority during the pandemic.

Additionally, the EBA has created a new category of 25 “team leaders” – 42% of whom are women – flattening the hierarchy within the regulator and allowing more room for advancement.

The EU banking regulator is also working on more coaching and mentoring for female staff, as well as unconscious bias training for managers.

“My deep belief is that as a public organization, we should resemble the society in which we are embedded,” Michaud said.

The Paris-based regulator has always had a gender split of around 50-50 among its staff, ‘but women have failed to rise to the top [managerial] positions… so we are rebalancing for that,” Michaud said.

The former European Central Bank supervisor said the effort was not intended to promote women over men, but to create more opportunities for both. “It’s a matter of equal opportunity,” he said.

Michaud pointed to research showing that a mix of genders can prevent groupthink on boards. “A lot of research shows that in terms of economic or political results, it is beneficial that this work is prepared and executed by balanced teams,” he added.

Yet there are areas where there are fewer qualified female candidates – for example, computer science, economics and statistics – due to a smaller pool of women choosing these subjects as a career at university. .

And overall, the share of women in all EBA leadership positions is 36%, well below an even distribution.

Austrian MEP Evelyn Regner, vice-president of the European Parliament and until recently chair of the Committee on Women’s Rights and Gender Equality – one of the main voices calling for more female appointments – has been following the progress of the regulator.

In a speech at an EBA event on gender equality for financial authority staff in January, Regner highlighted the key issues holding women back. These include the fact that decision-makers are still predominantly men, while women bear the brunt of unpaid care of parents and children. Additionally, there is a lack of female representation in sectors such as financial services.

The Socialists and Democrats MEP told POLITICO that European supervisors are improving, including at the EBA under Michaud’s influence – but that’s because lawmakers haven’t let go.

“The change… that happened didn’t happen by chance. It was because we as the European Parliament were pushing, pushing, pushing,” she said.

“[It’s] not only that the number of women heading these institutions is increasing,” added Regner. “There really is a plan behind this.

National Laggards

Yet the picture is not so progressive when it comes to the decision-making councils of financial authorities in the EU, where the gender divide is far from 50-50.

The supervisory board of each authority is made up of representatives of the national regulators. For the Paris-based ESMA, according to its website, that includes nine women and 17 men, with one empty seat, which equates to less than 35% women.

Similarly, at EIOPA, the national regulators who are voting members of its board include 10 women and 17 men.

The EBA figures are even lower. Only six women make up the national representatives on its board of directors, against 20 men and one vacant post. That’s less than 25% female representation.

The imbalance comes as EU regulators are pushing the financial sector to consider gender before appointing board members, which could expose them to accusations of hypocrisy. The EBA has estimated that two-thirds of banks’ boards are all-male, despite a correlation between women and profitability.

Irene Tinagli, chair of the European Parliament’s economics committee, suggested on Monday that the problem is worse at the national level.

While pointing the finger at female economic pioneers like European Central Bank President Christine Lagarde and US Treasury Secretary Janet Yellen, the Italian MEP said “more needs to be done” at the national level “where we still see a huge gap in women’s participation in economic and financial life”. sector.”

“For decades, society has attached a strong stigma to women handling money. And even today, in many subtle ways, many parts of society continue to tell women that making money, managing or investing money is a man’s job,” she said in an interview for a European Commission newsletter.

“We have to eliminate this stigma,” she said.

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