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Governance

European pension funds better at promoting gender equality, research finds

European pension funds are doing better than sovereign wealth funds and central banks at promoting gender equality, new research finds.

However, the work by the Official Monetary and Financial Institutions Forum, which is a central banking, economic policy and public investment think tank, still found inequality among these funds.

The organization's Gender Balance index tracks the presence of men and women among senior staff within central banks, sovereign wealth funds and public pension funds. It weights by seniority, with those in executive roles given higher weightings than non-executive roles. The GBI for each entity is calculated using the ratio of female and male personnel, with a gender-balanced institution awarded a score of 100%.

For pension funds and sovereign wealth funds, country, regional and global index values are also weighted by total assets, while central banks are weighted by the relevant GDP of the country in which it operates.

It is the fourth annual report on gender balance in central banks. Separate indexes for sovereign wealth funds and European public pension funds were included for the first time.

European public pension funds achieved a 40% score, the highest overall for the three types of institutions in the research. "This may be because the research covers only Europe this year, a region that advocates gender balance," the research report said, citing encouragement by the European Commission to achieve a 40% share of women on corporate boards.

Central banks' GBI score fell to 19.4% in the 2018 research, from 30.6% in 2017. The number of central banks led by women fell to 11 out of the 173 institutions covered by the research. The number of central banks with women at the deputy governor level was 53, up from 52 last year.

The research report said the lower score for central banks overall can largely be explained by the resignation of women from positions at central banks where GDPs are higher.

"The biggest single factor was the departure of Janet Yellen, U.S. Federal Reserve chair, in February 2018," the report said. This also explains a drop in North America's regional score, falling to 24.5% from 68.6%. Europe had the highest regional score with 34.8%.

The U.K. also suffered in the index by region, with a fall in its score to 20.4%, from 29% last year. The report cited the departures of two senior staff members from the Bank of England, whose terms ended over the past year. The report also highlighted that the tenures of two members of the BoE's court of directors are set to expire in July, "creating further challenges for the BoE's diversity agenda."

Sovereign wealth funds, however, "are missing the benefit of gender-diverse perspectives in decision-making," with a GBI score of 12%. Almost one-third of the 70 funds covered by the research had no senior female staff members. Nine funds are led by women, with three holding that post in an ex-officio capacity.

By region, sovereign wealth funds in Africa scored the highest with six funds in the top 20. The Middle East's five biggest funds covered by the research had no women on their executive management teams or boards of directors. "Together they make up 80% of the region's (assets), pulling down its index score to just 1%."

The report is available for download on the OMFIF website.