Just another gender imbalance

Mario Draghi, president European Centralbank, speaks during the European Banking Congress, on November 23, 2012 in ...

Mario Draghi, president European Centralbank, speaks during the European Banking Congress, on November 23, 2012 in Frankfurt am Main, Germany. (Photo by Hannelore Foerster/Getty Images)

Earlier this month, members of the European Parliament took a stand against gender imbalance at the European Central Bank, voting 325-300 against the appointment of Luxembourg's Yves Mersch to its board because of the lack of female candidates for the job.

It's not hard to see why people weren't happy. The ECB's 23-seat governing council - made up of a six-person executive board plus the 17 heads of the eurozone's central banks - currently includes exactly zero women. Meanwhile, a little further down the employment pipeline, just two of the bank's 21 directorates are led by women.

The Mersh defeat might not have been overwhelming, but it was still an embarrassment for the ECB. Some of the no-voters were openly triumphant: by French MEP Sophie Goulard's reckoning, the rejection showed "the council [of ministers] cannot ignore women and gender equality".

Sadly, that is exactly what the ECB can do, and it did. The parliamentary vote is non-binding, so last Friday the bank announced that Mersch would join the board for an eight-year term, while ECB president Mario Draghi assured disgruntled feminists across the eurozone that "gender considerations are close to our minds and hearts", while fumbling through his papers in search of the one with the list of the ECB's woman-friendly initiatives on it.


Mersch, meanwhile, made his own feelings - along with his excellent background in economic thought - clear: "The question of imbalances, when it comes to human resources, is a question that needs to be solved on the time axis and cannot be solved in a single nomination."

His words might sound a bit like they were generated by a Turing machine, but his sentiment isn't totally unreasonable. Solving Europe's current economic nightmare is going to take the best economic brains on offer, and in central banking terms Mersch's is certainly one of the most experienced. The head of Luxembourg's central bank since 1998, Mersch has sat on the ECB's governing council since the year it was formed. His economic career has been long and successful, and he has the backing of Northern European countries who like his approach to keeping inflation down.

Meanwhile, the ECB has also gone a bit further down the time axis - five months further - than it should have in finding its sixth executive board member. The empty seat has limited the bank in fulfilling some of its duties at a time when the European economy really could do with some attention.

What Mersch can't offer, though, is a new perspective. Diversity on boards, the European Commission argued in a recent report, improves company performance, corporate governance and ethics, and the creativity and innovation of decision-making - all of which the ECB could no doubt use just now. Soledad Nunez Ramos, director-general at the Spanish treasury, or Germany's Sabine Lautenschlaeger, a vice-president at the Bundesbank, might have less experience as central bankers than Mersch but on a board with so much already, that might actually be a plus.

Nevertheless, good female candidates for the board are few in number - and with so few women leading directorates at the ECB, that's not about to change. Earlier this month, Mario Draghi outlined the initiatives already in action to shift the balance, including mentoring for female staff and childminding facilities - but these initiatives clearly haven't been enough as yet.

This week, quotas for women in executive positions have been up for discussion again in Australia: the government's Equal Opportunity for Women in the Workplace Agency is suggesting their introduction within four years if the current voluntary targets aren't met.

Quotas would redress the numbers quickly, but women in business and finance are often wary of being seen as "token" hires. Some genius somewhere is always going to blame people appointed by quota for the failings of a company (or in this case, international economy).

But if the situation seems hopeless, it's not. Over in the US, home to such forward-thinking ideas as "legitimate rape", the Federal Reserve's seven-person board includes three women.

It's never used quotas. Its first female board member was only appointed in 1978 and as recently as 1994, Bloomberg Businessweek quoted a female staffer describing the place as "just permeated with male whiteness" and predicting it would take another twenty years to even out the gender imbalance.

By 1996, however, three women had been elected to the board. Unlike the ECB, by the mid-1990s the Fed's second tier was already almost one-third women, so there were female candidates to choose from.

Twenty years later, the ECB should take note: listing the initiatives which show gender balance is close to your heart and mind is well-meaning, but if you want to create a pipeline of future executive board members - and you want to hire from within - you will need to find new ways to bring in women at directorate level: more initiatives, voluntary departmental targets or failing those, quotas.

With the next ECB board vacancy unlikely to appear before June 2018, the bank surely has long enough to do a better job with its human resources before we reach that point on the time axis.