Lagarde Trailblazing at ECB Puts Onus on U.K. to Follow Suit

(Bloomberg) --

Boris Johnson’s government has just been presented with a novel idea for the next head of the Bank of England: pick a woman.

Christine Lagarde’s nomination in July as the European Central Bank’s first female president now shifts the onus onto the U.K., where a successor to Mark Carney will shortly be chosen. If the prime minister and his finance minister, Sajid Javid, preserve the monopoly of men running the BOE, the next chance to fix that might be eight years away, when the next chief’s term would end.

By then, the BOE would have had male-only leadership for 333 years, spanning 121 governors: an ever more festering embarrassment when compared with younger economic institutions such as the U.S. Federal Reserve, the ECB and the International Monetary Fund, who will all have been led at least once by a woman.

“It’s a global issue, for more women to be in senior positions in central banks,” said Sharon Bowles, who applied for the BOE’s top job in 2012, before losing out to Carney. “It would be an enormously important symbol.”

Carney’s replacement is one of the most crucial economic decisions facing the government before the U.K.’s scheduled withdrawal from the European Union on Oct. 31.

About 30 people applied under a recruitment process managed by Javid’s predecessor as Chancellor of the Exchequer, Philip Hammond, who compiled a shortlist for the next administration with the help of a headhunting firm that specializes in diversity. At least two of the total applicants are women.

Potential female candidates could include Carney’s former deputy Minouche Shafik and Santander U.K. Plc Chair Shriti Vadera. Shafik was the highest-placed woman in Bloomberg’s latest survey of economists for the role, ranking joint seventh overall.

Here are the most-likely nominees, based on a Bloomberg poll of economists

The BOE’s patchy record on gender extends beyond the governors’ office. Of the central bank’s current five deputy governors, Chief Operating Officer Joanna Place is the sole woman, and currently both the nine-member Monetary Policy Committee and 12-member Financial Policy Committee also only have one female official each.

While two women -- Colette Bowe and Jayne-Anne Gadhia -- had been due to join the FPC in coming months, it was announced Tuesday that Gadhia would no longer take up her appointment after taking the job of U.K. and Ireland Chief Executive at Salesforce.

Johnson’s own record on diversity has been mixed since he took power last month. He claimed plaudits for appointing a woman from an ethnic minority, Priti Patel, to lead the Home Office, while Javid is the first-ever chancellor with a Muslim family background.

But Javid’s appointment also preserved the exclusively male grip on a position whose origins date back to the 12th century, long before even the BOE’s creation. The government’s approach to other economic roles has similarly fallen short: all its Treasury ministers are male.

While the previous Prime Minister Theresa May suggested to lawmakers in May that she would welcome a female successor to Carney, the incoming government hasn’t disclosed any such ambitions of its own.

Whatever it decides, diversity is a lesser priority for the new administration than the overarching economic challenge of Brexit, with the looming danger of the country crashing out of the EU without a transition deal.

While Carney would be on watch if that happens later this year, Johnson and Javid will select the next governor mindful that the main task of his successor could be to steady the economy during the turbulence that might persist in the months and years after he leaves at the end of January.

If they decide a man should do that job, the U.K. won’t be alone in its lack of diversity. The Fed and ECB remain the only central banks in the Group of Seven ever to have been led by a woman. And in the group photo for the most recent G-7 meeting of finance chiefs in France, there wasn’t a single female face.

To contact the reporters on this story: Craig Stirling in Frankfurt at cstirling1@bloomberg.net;Eddie Spence in London at espence11@bloomberg.net

To contact the editors responsible for this story: Simon Kennedy at skennedy4@bloomberg.net, Lucy Meakin, David Goodman

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