Women at the Reserve Bank

My post the other day, about the Treasury paper on “Women in economics”, was mostly about the apparent waste of (probably quite expensive) staff resources –  diverted from the real and substantive economic challenges Treasury should be addressing.  It seemed to be about virtue-signalling and feel-goodism more than focused analysis, made all the worse because the authors weren’t new graduates repeating an honours project (sometimes the basis for NZAE papers by young economists); indeed one of the authors is the chief economist of The Treasury, a deputy secretary no less.  Of course, that paper in itself was just a small example of what has gone wrong at The Treasury under its current leadership (facilitated by both the past and present government).  The Living Standards Framework, and the coming Wellbeing Budget, are the more prominent examples: a “well-meaning wafflefest” is the best that is likely to be said for that.   The quote is from Pattrick Smellie’s column today –  he seems slightly more optimistic than I am, noting the “intellectual grunt of The Treasury” (perhaps his memories of his time as Roger Douglas’s press secretary in the days when Treasury had intellectual grunt –  agree with them or not), but clearly a bit uneasy that it might all come to nothing much.

As I noted in comments to the previous post, I spent a couple of years working at The Treasury, and although it was getting on for a decade ago now, one of the things that struck me then –  recall, I was coming from the Reserve Bank – was the much higher proportion of women in economics, policy, and core management roles.  Frankly, I found it refreshing, and it was the only time in my working life when I sometimes went to economics/policy meetings at which there were more women than men.  I was struck then by the openness of The Treasury to part-time work, and to job-sharing arrangements, which seemed to make the place more attractive to women, especially those with young children (including several who had moved from the Reserve Bank to The Treasury).  The situation is also self-reinforcing –  when some (future) parents see flexible arrangements in an institution genuinely working for other people, it gives them more confidence it can work for them.  My own children were very young at the time, and my wife was considering going back to work, so they were issues that I paid attention to.

Perhaps it has all gone downhill again, even in these areas, in the last few years.  But I doubt it.   Which is partly why I struggle to take seriously Gabs Makhlouf, Tim Ng, and the rest of them whipping themselves about not meeting self-imposed quotas –  or indeed giving more attention to such issues, including in their Annual Report, than to lifting analytical excellence and the quality of their policy advice.   It just isn’t clear that they are addressing a real problem in The Treasury –  perhaps exemplified by them discovering that the institution had been using a tool that would have discouraged the use of words like “analysis” in job adverts, because they were somehow male-dominated words.

By contrast, I think there probably is a real situation that needs addressing at the Reserve Bank.  Here is how I described my assessment of the situation at the Bank in a comment on a post a few months ago

I agree that sex is not, and should not be, a relevant criterion in the selection of a Governor. But I also recognise that in a powerful public sector institution, with a high public profile and pervasive impact, in this era it isn’t necessarily inappropriate that questions should be asked to understand why, after 84 years there has never been a women appointed to a policy or operational senior management position (Governors, or heads of economics, financial markets, macrofinanancial stability, prudential regulation, or even notes and coins). For years, I defended those outcomes as mostly reflecting preferences (far more men end up doing macro and finance – and far more women do health and social economics etc), and I still think there is something to that story, but I’m no longer convinced it is enough of an explanation – substantively or politically. After all, Janet Yellen has just stepped down, and the RBA has two pretty impressive female Assistant Governors.

A commenter on my Treasury post drew my attention to an article from a couple of months ago, quoting the new Governor, that I hadn’t seen.   In it, Adrian Orr says

“I’m disappointed that it is as imbalanced as it is. We will be working actively. We are just going to have to be far more aggressive at getting the gender balance balanced,” Orr said in a recent interview with BusinessDesk.

Consistent with my comments in that quote just above

At the Reserve Bank, 36 percent of its 252 staff were women, although that dropped down to 20 percent of management roles – including managers and team leaders and senior positions of influence – and 26.2 percent of senior specialist roles. The Reserve Bank’s website shows just two of 13 senior managers are women: chief information officer Klarissa Plimmer and human resources head Lindsay Jenkin.

To its credit, the Bank is now being a bit more open with some of the data

In the year to June 30, 2017, the bank tried to hire six mid and senior management positions, attracting 101 external applicants, of which 19 were women. Of the four external hires, only one was female.

In particular, the data around applications for the position of Governor.    They initially refused to release this data, only relenting after the (surprisingly quick) intervention of the Ombudsman.

In the same vein, the hiring process that appointed Orr attracted 48 applicants, of which just six were women. Only two of those women made the final short list of 25.

But in a sense, the data on applicants for the position of Governor highlight that whatever is going on, isn’t a simple and straightforward story about (eg) institutional bias.

After all, anyone is free to apply, and in applying to be Governor you are backing yourself to be able to make a difference, including if you had heard that the Bank wasn’t (say) very welcoming to capable women.

And who got to make the decisions?  Well, the Minister of Finance was the final decisionmaker, and even he had to take the nomination to Cabinet (chaired by a woman).  But the real decision on the appointment of the Governor was made by the Reserve Bank’s Board.   And at the time, late last year, of the six Board members, three were women (including the deputy chair).  I only know one of the three, but none looks like the sort of person who would be pushed around by anyone, let alone consciously or unconsciously biased against female candidates.

Successful organisations mostly end up promoting from within.  It is a mark of the Reserve Bank’s failure as an organisation that 1982 was the last time an internal candidate was appointed as Governor and, perhaps even more so, that currently three of the four most senior positions (including Governor and Deputy Governor) are held by outsiders.  The failure of the Reserve Bank to have women in senior core functional positions (top advisers or senior managers) is, to a substantial extent, a failure of history, the failure to develop and maintain a culture and working arrangements that made it attractive for the very many female economics (and related) graduates the Bank has recruited over the years to stay.  Of course, most of all the graduates the Bank hires go on to do other things, but not one of the many female hires has stayed. I look around Wellington and see various women who once worked for the Bank in economics roles now holding relatively senior positions in other agencies.

The Bank itself has made this point.

The Reserve Bank admitted as much during a Parliamentary review of its 2017 annual report in February, with then acting governor Grant Spencer saying the bank hired a lot of women graduates, but struggled to retain women in senior and management roles

It is the single biggest difference between the Reserve Bank of New Zealand and the Reserve Bank of Australia: both of the two (impressive) female RBA Assistant Governors (in core areas –  economics and financial system) have spent the bulk of their careers at the RBA.  There has been nothing similar at the Reserve Bank of New Zealand.

To be sure, the Reserve Bank of New Zealand is a smaller organisation.  And no organisation can compel an individual to stay.  And I –  and probably most people –  am firmly opposed to so-called “positive discrimination”.  But our central bank should be the sort of place –  interesting work, reasonable prestige –  that plenty of able people (male and female) would want to stay at.

I wrote earlier about my observations of flexible working arrangements at The Treasury.  There was, in practice, nothing similar at the Reserve Bank; few or no examples of it working successfully, even if on paper the rules allowed it.  In my observation, it wasn’t that senior managers were in any active sense discriminating against women, but they just didn’t have a mindset that focused on creating an environment where women (in particular) who wanted to be parents as well as economists would find it most attractive to work.  That was still my observation, as part of the Economics Department management group, just a few years ago.  And, as a result, decades on the Bank seems to have not many more women in senior policy or analysis roles than it did when I started there 35 years ago.

Is the quality of the Bank’s work poorer as a result?  Probably not much, but probably a bit –  I seriously doubt there is a distinctive female perspective on macro or financial stability or bank regulation, but some of those very able women who didn’t stay might well have made a stronger contribution than at least some of the men who did.  We’ll never know.

There are probably aren’t any wise quick fixes.  As the pool of applicants for Governor suggests, there aren’t currently many women in New Zealand with a strong interest and/or the skills/experience for the very top roles in the Bank.  And, as the Treasury paper noted, the number of people doing economics to an advanced level at university is falling, and the proportion of women among them seems to be falling away a bit too.   Absent token appointments (which would be bad for everyone, except perhaps the appointee, and perhaps even her) fixing the Bank is likely to be the work of a decade or more –  most worthwhile things probably are.  But it still needs to be treated as a priority, for both substantive reasons, and because the Bank is a high profile and very powerful institution and questions will (and should) be asked.

What worries me a bit is that the Governor often shows signs of appearing to favour the quick win and the rather-too-glib answers, rather than digging more deeply into issues.  He has, after all, lots of turf battles to fight in the next few years, and a government that is all too keen on quotas.  In the article my reader linked to there was a private sector example of the sort of questionable responses to external pressures

ANZ Bank New Zealand has a policy that any short list for a position must be 50:50 gender split and the interview panel must also be equally split.

And yet, if honours graduates in economics are roughly one third female and two thirds male, a shortlist requirement of 50/50 male and female will (by construction) often not mean that only the best candidates are on the list.

And keep an eye out for appointments from the Governor in which he chooses to positively discriminate (while no doubt denying it).  I was a bit puzzled recently to see who the Bank had appointed an acting head of its Macro-financial Department (to fill in for a substantial period while the permanent head is on secondment leading the review of the RB Act).  The Macrofinancial Department is responsible for producing the Financial Stability Report, and for analysis and policy advice on macro-stability and macro-prudential issues. It also happens to include the Bank’s statistics unit (which doesn’t naturally fit in any of the core departments).  The acting head of the unit has no background at all in financial stability, regulatory policy or anything of the sort.  I gather she is quite well-regarded as manager of the statistics unit, but is hardly a natural fit for leading the entire policy-focused department.   Perhaps she really was the best available option, but when the Governor is out promising to be “aggressive” in rebalancing the statistics, it is inevitable (and sadly appropriate) that the question will have to be asked.

Change needs to come, but it needs to be done well and wisely.


26 thoughts on “Women at the Reserve Bank

  1. Both the Reserve Bank and Treasury might want to reflect on the lack of meaningful support handed to the Kids Reserve creche that was moved from the RB in 2015. An on-site creche in the CBD seems like precisely the kind of innovation to provide working conditions to help retain staff. Shame.

    Liked by 1 person

    • Hi Kirdan

      I’m sympathetic to the concerns about that decision. Then again, the Bank had had the childcare centre for 20 years and in that time the female representation/retention numbers didn’t seem to have changed much.


  2. when Patrick Smellie was Douglas’s press secretary, and Treasury supposedly had intellectual grunt (courtesy of libertarian courses at American universities), there was also a revolving door with Fay Richwhite, and other merchant banks also got sweetheart deals.


    • As I said, agree with them or not. They had their fair share of wacky ideas/analysis back then. The key difference, to my mind, is that in those days their senior people genuinely cared about turned around decades of underperformance. These days, their counterparts have no serious ideas about reversing the (continued) underperformance, and show no signs of really caring either.


    • As a noun, reserve refers to the quality of a shy or modest person who doesn’t easily express his or her feelings. That sounds almost feminine.

      or alternatively

      a body of troops withheld from action to reinforce or protect others, or additional to the regular forces and available in an emergency. Which sounds masculine.

      Is the problem the title of the supremo: ‘Governor’. Make that Governess and the RB would attract strong minded self-confident women.


  3. off topic, but I’ve come to think the Governor title should be dropped, and replaced with a simple chief executive title. Governor has the merit of tradition, but it also tends to connote some power/status beyond what really should go with being the executive head of a government agency. I quite like the old Secretary titles (eg Secretary to the Treasury), which at least connote somes subordinate status.

    Feminists and people who want to throw off our British heritage could probably join me on this one…..


  4. It interests me that you think (as a white, CIS, heterosexual man) that you have any authority to discuss the future of gender minorities in this context. Your opinion is not valid in this conversation.


    • Last time I looked there were more women than men in New Zealand.

      But perhaps you could elaborate on why you think my opinion is not valid in “this conversation”? Apart from anything else, I am conscious that I was a senior manager in this organisation for a time, and held reasonably prominent positions in it for 25 years, so I’m partly reflecting on my experience, and my unease about the outcomes that persisted during that period.

      Also, as noted earlier in the week, there are occupations that are overwhelmingly female and others than are overwhelming male. Understanding those patterns is part of a human quest for knowledge, understanding etc.

      In addition, I could note that I’m the husband of a senior public servant, a father of two girls who will be joining the workforce in the next decade or so, and so I have a very strong interest in ensuring there are no institutional barriers to their opportunities. Oh, and that these posts were about an organisation whose CEO and Board chair are both male (as was one of the authors of the Treasury paper).


      • From the statistics you gave women are a gender minority at the bank? The title of your post is “Women at the Reserve Bank” ? (Not New Zealand) .
        And your point about your wife (while admirable) does not give any more validity to your perspective. It is the same rhetoric used in arguments “I cant be homophobic as I have a gay friend”.
        Why not talk directly to a number of women employed in current roles at the bank and deepen your understanding that way?
        Why not consider that the people, not fairly represented, are those who hold more weight in the conversation?


      • I spent 32 years working with people – male and female – at the RB, including debating exactly these sorts of issues.

        That said, I don’t accept the framing “not fairly represented”, nor that minorities (in any specific situation) should “hold more weight” in any conversation. I’m a minority in many these days – evangelical Christian – and certainly wouldn’t think to assert such status in any debate.

        But it seems that this is a “can’t win” exchange. As you’ll note, I explicitly noted that it was troubling, and probably more, that 84 years in no really senior position at the RB had been held by a woman. That is a starker statement than I’ve seen from anyone else re the RB, and yet – on your argument – it is an invalid perspective because I’m male (and it is even less clear to me why being heterosexual – like most people – has anything at all to do with the debate).


  5. If you are serious about playing an active part in ensuring equality of opportunity for your children, why post an opinion piece which openly attempts to question the appointment of women at the bank? The argument about the potential to “discriminate against a better fit” has long been used to justify the dominance of white men in these roles, and has been harmful to racial and gender diversity across organisations such as this. I would argue that writing an opinion piece, where you attempt to invalidate the appointment of a woman, is just adding to the inequality.

    If you are serious about ensuring a different future for your daughters, actively pursue it. Chat to local involved feminists, read some modern feminist discourse, educate yourself on the plight of underrepresented gender minorities, become an ally.


    • I would advocate asking the women who have left the RBNZ, not those who are still there. More importantly, to ask ALL the women who have left, not just those who the RBNZ consider ‘friendly’. I believe the RBNZ is currently asking ex bankers…selectively. By being selective in its choices, they are biasing their responses. Likewise, those people asked, if in a position in Wellington or related to the industry, will not be fully open in their response – won’t want to burn bridges and all that.


    • Last night I had a conversation with my daughter about her budding career in consulting in one of the big 4 Chartered Accountants and we tried to relate her early career to my early career when I was her age starting my first job. She was a excellent scholar at University of Auckland compared to my average performance and in her new consulting job she has already achieved top honors for her start up contribution compared to her peers in the consultancy firm. Clearly she has twice my ability and skills.

      Surprisingly, even with her abilities and skills she had major self esteem issues. The conversation went around,

      1. I am scared I am not good enough
      2. I was told to chill out as I over compensated for my mistakes
      3. I need to work after dinner tonight to catch up
      4. I need to eat as i am working, can you get me some takeaway desserts as i need some food comfort

      All of this is typical of most women, fear.

      I told her that when I was her age I had trepidation entering the job market but I used my fear as a driver to achieve a higher standard. My view was if I was not good enough at that lower level then no point competing with lots of people, instead just move upwards and compete with fewer people until you reach to top and need not compete.

      In my youth I had read a series of Sci Fi books called Dune that formulated my early thinking about overcoming fear. The one I can always call up was a super cult of witches called Bene Gesserit and their cult mantra was, “Fear is a mind killer”.


  6. Read my piece in full. It explicitly highlights the problem at the Bank, while noting that (as regards the Governor appointment) the pool of interested women seemed very small, even in a process which applicants knew that the Board was 50/50 male/female, and noting (as I’ve done in previous posts) my concerns about the tendencies of the Governor on all sorts of issues. It was – and remains – a call for wise change not tokenistic change.

    Modern feminism is very much a mixed bag. I regard significant parts of it as fundamentally corrosive. That doesn’t mean I oppose equal opportunity for all or (as I made quite clear in the post) institutions like the RB and Tsy working actively (as I believe Treasury has) to limit or remove inadvertent roadblocks that complicate career options for those (mostly women, but not only) who want to more actively combine career and parenting.


    • But again, why is your “regard” of modern day feminism relevant? This isn’t a conversation that your opinion matters on.

      Have you not wondered that it might be the dominance of male driven opinion, such as this piece, that their is such a “small pool”?

      And discrimination against sexual orientation is part of the discussion around gender, (and that you felt the need to highlight your sexual orientation “as the majority” illustrates my point) so that is why i raised it.


      • The only relevance of my view of modern day feminism is that you invited me to consider it, engage with its authors etc.

        You continue to claim that my opinion doesn’t matter. Clearly not to you, but as it happens I’m a voter too, and these are public agencies.

        Did you read my first response? I noted there that I had been reflecting on my own experience and involvement, including wondering to what extent my choices/attitudes might have influenced outcomes.

        On your final point, I guess we will just agree to disagree. But it was you who highlighted my sexual orientation not me. I don’t see it as relevant (altho as it happens, when i read the Ng/Morrissey paper I did wonder when the “sexual orientation in economics” paper might be forthcoming from the Treasury. And for the avoidance of doubt, if academics want to debate such things, i have no particular objection, but Treasury analytical resources are scarce, and there are real and major economic problems they aren’t addressing when resources are devoted to papers like that (and, for that matter, the entire wellbeing agenda).


  7. This discussion is clearly going nowhere. It saddens me that with your obvious technical knowledge, and desire for understanding, you are just continuing to regenerate the old arguments used to discriminate against women in these roles.

    I think the world is moving on without you.


  8. I agree it is going nowhere, but I’m not leaving unchallenged the suggestion that I support any sort of discrimation against women “in these roles”. Didn’t I note in my post, my regard for Luci Ellis and Michelle Bullock in Assistant Governor roles at the Reserve Bank of Australia?

    As it happens, I agree with your last sentence. In many respects, society is heading in directions I would have no desire to follow.

    Liked by 1 person

  9. Some years ago, before the silence, when Makhlouf was prolific in making public speeches, he was here, he was there, he was everywhere. Now he is silent. In a 2012 speech he said :- “We have a number of staff hailing from different parts of the globe and employ people from a range of disciplines and experiences. Along with economists, we’ve got qualified biologists, psychologists, anthropologists, sociologists, musicologists, and others.”



  10. Michael, having worked at and managed teams at the Reserve Banks of New Zealand and Australia and the NZ Treasury, I agree with your observations – like you, my observations are nearly ten years old. I particularly agree with the last sentence of your post, to which I would add ‘consistently’. It’s well and good changing policies but only a consistent change in practice will help retain and attract a diverse workforce, across gender and other dimensions. I’m now managing a team where the majority of my direct reports (themselves managing teams) work part time, either independently or in job share arrangements. People often work from home, either ad hoc or the same day every week. Having done and openly celebrated this, we now have people returning from parental leave knocking on our door to work with us. As a result, we have access to a larger pool of excellent talent than we would have had if had we insisted on full time roles, based permanently in the office.


  11. Hi Michael,

    Just wondering if your legitimacy for a role has been descredited in a public forum because of a question of gender?

    If the answer is No does this help you understand some of the frustration here?

    The first part of the article just seems like you’re trying to collecting points for yourself. Then you can have a crack at a specific person a common theme in all of your commentaries.


    • Curiously enough, you may have noticed another commenter suggesting that I was disqualified to comment on these issues at all , not just because I was male, but also apparently because of being white and heterosexual.

      If you read the post you will observe that I am not questioning anyone’s suitability for anything on account of their sex. With the sort of background the person has I would not naturally think them qualified for the role, male or female (in fact I had commented privately specifically on that apparent unsuitability before I had seen Orr’s comments that I touch on in this post). As it is, having been given the acting role, I hope it works out well for her and for the Bank. If I am critical of anyone specifically in this post, it is the (male) Governor and the (male) Secretary to the Treasury.


  12. Michael, career moves to and from statistics and policy domains are not uncommon. You have singled out the recent promotion because of her gender. If your point is that you disagree with lateral career moves then you have made it poorly in this post. You attempted to publicly discredit a woman who was promoted by insinuating she was promoted due to gender. This type of behaviour reveals an insidious bias against woman. You are so quick to conclude she is not qualified despite having no conclusive information. I also disagree with you tokenising your wife to suggest you are not biased against women (tokenisation is a common and weak attempt at covering biases). You have provided a clear example of the biases women in economics and finance have to overcome. If you want to help woman in these careers I suggest you begin to reflect on how your internal biases are harming women.


    • This is an extraordinary (and patronising) comment in a number of dimensions. You seem to think it amounts to “bias” that I don’t happen to agree with your interpretation of how things how things unfolded at the Bank over decades, even as you offer no evidence for that claim. Do you have any?

      Most offensively to me, you explicitly suggest that my expressed interest in the future options of my wife and daughters – which, as you know, arose only when another commenter tried to suggest I had no legitimate perspective, or right to commment on these issues – is unreal, invalid, or just some sort of cover. Since you barely know me, you have absolutely no basis for such claims, and should as matter of honour and decency apologise.

      As for the acting appointment that I commented on, go back and read that bit of the post. I am primarily being critical of the Governor, who had gone on record talking about acting aggressively. Faced with the appointment to an acting position of someone who is not, in my view and based on the material on the website, (and whether male or female) qualified for that role, I raised the possibility that the appointment might have been made on the basis of gender. As I noted in the post, perhaps it was not the case, and I also noted explicitly that the person is apparently well regarded in her substantive role, but given the lack of background the person had in the key policy bits of the department’s role it was likely that questions would be asked, and legitimately/appropriately so given the Governor’s comments. Token appointments (whether for race or gender) have not been unknown (not specifically at the Bank). And when people hold senior management positions, those appointments need to be scrutinised (especially in a Governor with a tendency towards glib rhetoric and cheap symbols).

      You claim “You are so quick to conclude she is not qualified despite having no conclusive information.” : as I noted, I drew on the material on the Bank’s own website, which I explicitly linked to, and did not suggest I had “conclusive information”, as you would recognise if you read what I said, not just read your own priors into what I wrote.

      As to suitability, I have been on record on this blog (eg here https://croakingcassandra.com/2017/06/01/thoughts-prompted-by-the-fsr/ and again in various later post) as regarding the Head of Financial Stability appointment last year (Dep Gov Geoff Bascand) as inappropriate. I don’t think he has the skills, experience, or demonstrated track record to fill such a position. Thus, my concern is heightened when the Governor appoints someone with little or no relevant experience as one of the DG’s direct reports, in a major policy area. As for transfers from statistics to policy, I don’t think I’ve seen many that have worked well other than at quite junior levels (over many years of watching). Given the Bank’s poor track record of management – in so many areas, not just male/female ones – it is quite plausible this questionable appointment would have been made even if it had been a male with such a limited background. If so, I’d have raised questions about that too – altho obviously not in a post about issues around women in the Bank.

      Identity politics – of the sort you seem to be engaging in – is almost always unhelpful and wrong. But I’m sure the Governor appreciates the support.


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