Speech

Keynote Speech by The IMF Managing Director: Women’s Corporate Director’s Korea Special Forum

December 14, 2023

Hello! Thank you to Deputy Prime Minister Choo for your kind remarks, to Ms. Kwon for your nice introduction, and to the “Women Corporate Directors’ Korea Chapter” for the invitation.

It’s a pleasure to share the stage—and the room—with such an outstanding group of inspiring leaders. You show the progress and promise of Korea’s women.

The good news is that you are part of a rising tide—women’s labor force participation in Korea has increased by six percentage points since 2011, from 49 percent to 55.5 percent.

In Korea and globally, empowering women economically is one of the most powerful tools to jump-start growth at a time when economic prospects over the next several years are the lowest in decades. More women workers can also mitigate flat or shrinking labor forces in many advanced economies, including in Korea.

The bad news is that despite progress globally, gender gaps are not closing. And Korea still has among the highest gaps for rich countries, with 18 percent fewer women working than men, and receiving 31 percent lower wages. This is largely due to perceived social norms and customs as well as the disparities in the dual labor market between workers with strong job protections and everyone else.

Globally, the number of women in work has grown too slowly in recent decades, and some countries have even slide backwards. The pandemic was another blow, as women left formal work to take care of families. In emerging and developing economies, their employment still hasn’t recovered. IMF research shows that on current trends, gender disparities would only narrow, never close.

But if we work together, this forecast will not be our fate.

We need to get more women into work with direct support, nimble labor markets, and updated customs.

To seek solutions, perhaps we can take a page from women’s golf, where 33 of the world’s top 100 players are Korean.

Why this dominance? Above all, it’s a credit to these women. A supportive environment is critical as well. Just as corporate sponsorship of athletes and tournaments fosters a pipeline of talented golfers, corporate—and government—action can advance women in every field.

Let’s look at what’s working already, and how countries like Korea bring their game to the next level.

First, direct support to help women balance work and family responsibilities. Korea’s government and companies have acted, with expanded child-care support, a full year of paid parental leave, and career transition assistance for mothers returning to the workforce.

There is room to broaden these programs to reach part-time, temporary, and self-employed workers, who are more likely to be women.

Support to them should also be deepened by adding re-training programs that help returning mothers enter higher-paid sectors, and retention programs that enable women to avoid a career break in the first place, if they want to.

Second, making the labor market more nimble. Korea has begun to do this with options for reduced and flexible work hours. Reaching the next level means expanding these flexibilities to more workers, as Finland and Sweden have done. Reducing the cost of hiring and dismissing workers is another important step. For example, our recent research shows that a thirty percent less generous severance pay would increase women in the workforce by nearly one percent, adding to overall employment.

The third area is updating social customs. The fact that we have such a room full of women leaders here shows progress. We know this room would have been much smaller even just seven years ago when the Women Corporate Directors’ Korea Chapter was founded.

It can get even bigger, we know from experience that incentivizing men to use parental leave is good for them, for their familes, and it keeps their seniority more equal with women who take leave. Efforts to shift from seniority-based to performance-based pay systems should continue as well. How well you hit the ball is what matters in golf. So it should be in every job.

Advanced economies like Korea can also help empower women in emerging and developing economies through bilateral aid. This can take on challenges from strengthening women’s legal rights and girls’ education, to providing clean drinking water in rural areas—which can save women hours of unpaid work every day. And companies that have employees or suppliers abroad can work to eliminate gender bias in hiring and promotions.

Under the gender strategy we launched last year, the IMF has ramped up support to our member governments. This includes helping them build the capacity to implement pro-gender equality policies in the areas I’ve mentioned. As the sixth largest overall donor to our capacity development work, we appreciate Korea’s generous support in this area.

Within the IMF, we’re empowering women by building a strong internal pipeline, including key diversity indicators in our business framework, participating in a leading global certification process, and hiring women of exceptional quality. One result: Women Department Heads have increased from 25 to 50 percent in four years, and three of our top five leaders—myself included—are women.

Empowering women can lead to higher incomes and stronger companies.

Sustained action by countries and companies will yield tremendous benefits. IMF research shows that with the right policies to reduce the gender gap in number of hours worked to the average across peer countries, Korea could increase per capita income by 18 percent—a huge amount.

Of particular interest to you as corporate directors, IMF staff research looking at European companies has shown a positive association between return on assets and the share of women in senior positions.

Research in the financial sector shows a higher share of women in leadership positions and more gender diversity on boards of financial institutions are associated with lower rates of non-performing loans and greater financial stability.

Simply put, having more women leaders and gender balanced decision improves organizational performance.

To anyone who doubts their ability to make a difference, or says that progress is always slow, just look at the story of women’s golf in Korea—and one player: Pak Se-ri.

Years of hard work brought Pak to the top tier of her sport globally. Then, 25 years ago at the U.S. Women’s Open, with her ball in a seemingly hopeless position, she took off her shoes, walked into the water, and made the impossible shot. Now, a whole generation of girls she inspired has grown up and created a new tradition of excellence—well beyond what anyone could have expected.

Every woman in this room has worked hard, broken barriers, and succeeded.

Like Pak, every woman in this room can inspire those coming up behind you.

And powered by your example, the next generation can achieve excellence beyond what anyone dares to expect today.

Thank you.