2. Empowering Women in Korea’s Corporations and Financial Sector
Let me begin with an IMF study of 2 million firms in 34 European countries. It found that adding one more woman onto the corporate board can help increase the return on assets by between 8 and 13 basis points.
In creative and hi-tech sectors, the return on assets can be as much as 30 basis points. With the Pangyo Creative Economy Valley under development, this finding should resonate.
Beyond profits, gender-diverse boards can also improve corporate governance. Forthcoming IMF staff research also finds that a greater share of women on bank and banking supervision boards could be associated with greater bank stability. In particular, banks with a higher share of women are associated with higher capital buffers and lower non-performing loan (NPL) ratios.
So how can we get more women onto corporate boards in a country like Korea — where just 14 of the 100 largest listed companies have a female director?
The family-friendly working practices that I mentioned earlier are absolute pre-requisites, but what else is needed? I do not claim to have all the answers — but let me share some thoughts based on three personal experiences.
I. Unconscious Bias
My first story. When I started working at Baker McKenzie in the 1980 s– despite my technical abilities and professional knowledge — there were occasions when external clients assumed I was only there to bring them coffee.
Today, sexism is more subtle — but, conscious or not, bias remains. When we talk of unconscious bias, we include the overall corporate culture, but also preconceptions about what breeds success.
It is important to bring unconscious biases out into the open, so they can be recognized, discussed, and addressed.
Options like "fast-tracking" promising women up the career ladder — so they can develop the right experience, skills and networks for senior management. Withholding names from selection committees can also pay dividends — "blind hiring" practices helped the Australian Bureau of Statistics increase the share of female senior executives from 21 to 43 percent.
Addressing bias is a critical step. Another tool, quotas, can also help — as my second story illustrates.
I used to think that quotas were unnecessary. Then I realized that, without them, it would take 5 generations until 30 percent of partners at my law firm were women. So I was converted to quotas, at least as a short-term solution.
As the debate around corporate quotas continues in Korea, there is much international experience to draw from. In recent years, we have seen several countries adopt corporate quotas. India did so in 2010, and the share of women on boards rose from 5 to 13 percent. In Malaysia, quotas helped double the proportion of female board members at the largest companies.
Mandatory legal quotas have also been introduced in parts of Europe. In Norway, over five years they supported a fourfold increase in the proportion of women on boards.
We must also acknowledge that international experience with mandated corporate quotas has not been universally successful. Some quotas have been poorly implemented, lacked incentives, or had insufficient buy-in. Quotas cannot be viewed in isolation, but only as part of a wider package of measures.
My final story is about mentorship. I was fortunate enough to have a role model, a mentor from whom I learned. She taught me how to "dress," "address," and "redress":
Dressing is presenting yourself in a way that made others take you seriously;
Addressing is making yourself understood; and,
Redressing is resolving conflicts and sticking up for your convictions.
For me, these lessons have stood the test of time.
Male champions of women’s empowerment can also play a crucial role. They can instill in their colleagues their understanding that gender diversity is critical for organizations to thrive — for the benefit of men and women alike.
Aside from my convictions, I can assure you that gender equality is taken very seriously at the IMF.
The IMF is committed to promoting gender equality because — as I said — empowering women is critical for economic growth and prosperity.
So we are developing a body of research on the economics of gender — analyzing the macroeconomic effects, but also identifying the main obstacles and polices.
We are taking gender considerations into account in our country programs and economic health-checks.
Many of our programs include gender-related provisions — most recently in Egypt, Jordan, and Niger.
As part of our economic health-checks, we have conducted 27 country and regional pilots that looked closely at this topic.
For several years, we have also discussed gender-related issues with the Korean authorities. We remain committed to this dialogue as you identify and implement further measures to promote gender equity.
In sum, the IMF will continue to bring women’s empowerment into the economic mainstream, because unleashing the potential of women is a global priority. This is especially the case in Korea. The time for action is now.
In the words of Ko Un, in his poem Arrows: "Let’s all soar together, body and soul!"
I have shared some of my own experiences, but I do not claim to have all the answers. I look forward to hearing your views.