The leadership structure of public sector banks (PSBs) in India has come under scrutiny as government data released recently shows a stark gender disparity atop these PSBs. Mountain out of a molehill: 73% of the FTSE 100 have at least one female executive director, up from 58% ten years ago. At first glance, the figures released this morning by the Hampton-Alexander review make for grim reading.
Public Sector Banks and Their Leadership – The Changing Face
The banks represent a large chunk of the Indian economy and are crucial to expanding financial access in cities and small towns. As such, their leadership has significant sway both over banking practices themselves and, by extension, broader economic policy and practice in the country. However, the makeup of these leadership teams calls into question inclusivity and equity.
In a survey of 11 top positions, only one is held by a woman, highlighting a recurring pattern of male-dominated executive leadership in the financial sector. Actually, this imbalance isn’t just a numbers game; rather, it points to systemic struggles that hinder women from climbing to the top tiers of C-suite ceilings.
Barriers to Female Leadership
The lack of women in leadership positions can be attributed to a mix of cultural, organizational, and social factors:
- Cultural Expectations: Cultural norms and expectations impart a larger burden on women, making it often difficult for women to balance their professional ambitions with their familial obligations.
- Organizational Bias—Men are not always aware of small biases that seep into recruitment, promotion, and mentorship. Women often run up against a ‘glass ceiling’—an invisible barrier to upward mobility that persists in the face of their apparent capacity.
- Networking Gaps: Many leadership roles stem from strong professional networks, and women often have lower access to these networks due to historical exclusion and limited representation in informal networking environments.
- Absence of Role Models: Not experiencing female leaders at the top creates a cycle where women who are looking at other women who have been successful at the top find few role models; that alone discourages them from pursuing a similar path.
Global Comparisons
Gender differences in international banking leadership—including in India—have a lot of common ground but vary widely. Countries in Scandinavia, for instance, have fairer gender representation partly due to their progressive reforms and focus on gender equality. Unlike developed economies, many developing economies deal with the double-edged sword of cultural resistance and limited institutional support for women professionals.
Gender Disparity Implications
That gender imbalance at the top has consequences that are far and wide:
- Innovation Gap: We have already discussed how diverse teams lead to varied viewpoints, which in turn breed creativity & innovation. A lack of diversity is a recipe for groupthink and missed opportunities.
- Why—Talent Drain: Owners and Workers Raiding Their Own Growth by Default, Not Activating the Power of Half of the World
- Economic Enablers: More gender-diverse boards and leadership teams are linked to better financial performance. So the lost leadership opportunities for women could have real economic costs.”
Steps Towards Inclusivity
- So fixing this imbalance will require a functioning alignment of policy, organizational will, and societal change:
- Policy Interventions: The government could use the regulatory framework to intervene as well and enforce gender diversity at leadership positions (similar to the quota in Norway).
- TAKE OUTSTANDING L&D PROGRAMS FOR WOMEN LEADERSHIP: It is time for companies to ensure investing in L&D programs aimed specifically at recruiting and nurturing ONLY women in leadership.
- Flexible Work Policies: As an organization, introducing (and normalizing the willingness to embrace) flexible work hours could go a long way in supporting women balancing their work and home life responsibilities.
- Spotlight Successful Leaders: When women leaders in banking are showcased, it inspires the next generations to aim for positions at the top of their fields.
The bottom line, however, is that bias exists, and balanced promoting processes with regular training on unconscious bias can ensure that the playing field is level for every employee.
Conclusion
There are two parts to the story. First, the gender imbalance in leadership positions at India’s public sector banks is indicative of larger, endemic inequalities. It is high time that policy-makers, organizations and society band together and take accountability for gender parity in leadership, despite refreshing strides to get females in our workforces. And thus, the public sector banks can help position the private sector banks to be more inclusive in their approach to business and also more equitable in their approach to business, and thus make their practice a sustainable pillar of their growth and prosperity. Part of this challenge is underpinned by fairness, but in essence it is a strategic impetus for sustainable growth and innovation.
Ready to grow your business? Need instant Business Loan?
We provide loans from ₹5 lakh to ₹2 crores for businesses at competitive rates.
Apply Now and fuel your entrepreneurial journey today!!!!!
