As the first woman to lead the International Monetary Fund, Christine Lagarde is among an elite group of people determining how money is saved, spent and invested worldwide.
It's not the first time she's been a "first." Lagarde was France's first female finance minister, and before that, the first woman to chair the global law firm Baker & McKenzie.
As part of NPR's look at the Changing Lives of Women, Morning Edition's Renee Montagne spoke with Lagarde about her career and what the IMF is doing to encourage economic growth by promoting women in the workforce.
On the findings of a recent IMF study on women in the workforce
We found out that half the women in the world are not working [in the paid labor force] either because they don't want to, or, much more often, because they simply can't work. So, women are underutilized.
The second finding is that women are overexploited. That is, in those places where they work, they generally work in the informal sector. And those employees who either do not get paid, or get paid a lot less than they should be paid, are women.
We found that if females were working in the same proportion as men do, the level of [gross domestic product] in a country like Egypt would be up 34 percent, up 27 percent in a country like India but also up 9 percent in Japan and up 5 percent in the United States. All economies have savings and productivity gains if women have access to the job market. It's not just a moral, philosophical or equal-opportunity matter. It's also an economic cause. It just makes economic sense. It's a no-brainer.
I'll give you two examples which I found really striking: Japan and [South] Korea. In both those countries the policymakers have decided to put women at the center of their budget and policies going forward. Why is that? Well, first of all, they have aging populations and they need to respond to that problem — they need more people to come to the workforce. They have available talented, well-educated, very often hard-working female workers that they can tap.
[Japanese] Prime Minister Abe has made that one of two or three centerpieces of his policy going forward. He's identified a big budget item to build child care centers in Japan, which is obviously one of the ways to lower the burden on women and facilitate their access to the job market. And he's pretty serious about it, to the point that his finance minister, his governor of the central bank of Japan, are advocating women joining the workforce. Although, sometimes one would sort of intuitively think that it's countercultural. Not at all. It makes business and economic sense, and therefore they are endorsing those policies. The same is pretty much true for Korea.
On slowly getting more women into upper management at the IMF
Although [the proportion of women in IMF management] is much too low, it is double what it was 10 years ago. I think one of the reasons has to do with the population from which management are drawn at this institution. Most of them are economists by training and background. All of them in those positions are generally Ph.D.s. And when you look for the population of female Ph.D.s from which you can draw those management skills, there are not that many of them. So when you start with a relatively small pool, and then when you bring them into the organization, it's probably a little bit harder and it requires much more of an effort. But we do have targets. We do have commitments, and we try to deliver on those and we are certainly going to continue to be focused on those.
There are now more and more young, talented female economists. So if any head of department tells me I can't hire a woman because I can't find any talented women, I would say rubbish. You have to go and look for those talented, skilled female economists. And I have to say we are making progress on that front. In the 2013 Economists Program, we hired 51 percent women, 49 percent men. We've hired a good number of Chinese economists — very competent, highly qualified, all Ph.D.s from the best universities of the world. And guess what? They're all women.
Where I perceive my role as making a difference is when I can encourage other women. If I'm the single voice constantly in a room full of men, it's only going to carry the organization so far. Where I think it really makes a difference is when I can endorse the middle management, or upper-middle management and make them — generally in the minority — make them comfortable, confident, prepared to share their views, to compare their notes and to speak up when they feel like speaking up. That's where I can make a real difference being at the top of the organization.
On being the only woman in the room
The IMF has an executive board [which interviewed Lagarde for her current job] which includes 24 members representing 188 countries. And of the 24 people in the room [for her interview] there were 24 men because the only female executive director was away ... . And unfortunately, that single female executive director is soon to be replaced by a male executive director, so I will soon have a board of 24 executive male directors.
I can't do anything about it except talk about it — and complain about it when I talk about it — because those people are actually appointed by the various countries around the world that comprise the membership of the IMF. And it's very unfortunate because, not that these men are incompetent — they're very competent — but diversity is a richness and we're not having the benefit of that.
On facing gender discrimination early in her career
When I started my life as a "baby lawyer," I was interviewing with all the best firms at the time, and one of them was probably the most reputable in France, and [the firm] told me, "We'll take you any time. You can join us tomorrow and be an associate, be given great tasks and great files and great clients to work on, but don't ever expect to make partnership." And I said, "Why would that be?" They said, "Because you're a woman." And I said, "Really? Well you won't have me as an associate." And I just left because I wasn't going to waste my time with those people. And I went to another firm which was great and which was based on respect and on equal opportunity for those who delivered.
On why the financial downturn might have turned out differently if the failed Lehman Brothers had been "Lehman Sisters"
I do believe women have different ways of taking risks, of addressing issues ... of ruminating a bit more before they jump to conclusions. And I think that as a result, particularly on the trading floor, in the financial markets in general, the approach would be different. I'm not suggesting that all key functions and roles should be held by women. But I think that there would have to be a much bigger diversity and a better sharing of those functions and roles. If you look at the studies ... it's apparently very clear now that those companies that have several female directors on their boards and females in their top management actually do better, are more profitable, and actually give a better return to their shareholders.
RENEE MONTAGNE, HOST:
Over the coming weeks, NPR will be reporting on women and money - how women save, earn and access it worldwide. It's part of an ongoing focus on how women's lives are changing in this century. One person who is keenly invested in moving women up the economic ladder is Christine Lagarde. She is head of the International Monetary Fund, the IMF. The IMF promotes the stability of the global economy through lending, forecasting and technical assistance. Lagarde has been using her position in the last two and a half years to challenge global leaders to focus specifically on women's economic empowerment as a way to bring about growth generally. She joined us from her office at the IMF in Washington, D.C. Good morning.
CHRISTINE LAGARDE: Good morning.
MONTAGNE: Now, under your leadership, the IMF commissioned a major study on women in the workforce. It finds that more inclusiveness would bring about greater economic growth. And the reverse of that, you might say, is that those countries that don't make use of their potential female workforce, that they're really missing out economically.
LAGARDE: Um-hum. We found some really interesting numbers. If female were working in the same proportion as men do, the level of GDP would be up 27 percent in a country like India, but also up 9 percent in Japan and up 5 percent in the United States of America. It's not just a moral issue, not just a philosophical issue. It just makes economic sense. You know, I was going to say it's a no-brainer.
MONTAGNE: It would seem so when it's laid out like that, but do you imagine that people think of it ever economically or is it mostly always thought of as just a good thing?
LAGARDE: You know, if it was just a good thing to do, it wouldn't go very far. And I'll give you two examples, the example of Japan and the example of Korea. In both those countries the policymakers have decided to put women at the center of their budget, at the center of their policies going forward. For instance, Prime Minister Abe. He's identified a big-budget item that will go to build child care centers in Japan, which is obviously one of the ways to lower the burden on women and facilitate their access to the job market.
MONTAGNE: Well, part of the issue here about bringing women to the workforce is not so much just bringing them to the workforce because, as your study notes, women are in lots of jobs that are low paid and have very little power. When you talk about management, one thing that's been noted since you were named the head of the IMF is that it itself has a stunningly low number of women in management, high management positions - only about 20 percent there.
MONTAGNE: What made it so hard for the IMF to get women in these higher positions?
LAGARDE: One of the reasons has to do with the population from which management are drawn. Most of them are economists. All of them in those positions are generally Ph.Ds. And when you look for the population of female Ph.Ds. from which you can draw those management skills, there are not that many of them. So, when you start with a relatively small pool, it's probably a little bit harder and it requires much more of an effort. But we do have targets. And we are certainly going to continue to be focused on those.
MONTAGNE: Well, you know, something that just struck me when you said that. In a way, we could be saying that there are just not enough women who have the qualifications for being in management. If a man said that, would he get in trouble?
LAGARDE: If a man said that to me, I think he might get in trouble, yes. There are now more and more young, talented female economists. So, if any head of department tells me, no, I'm terribly sorry, I can't hire a woman because I can't find any talented or competent women, I would say rubbish. In the 2013 Economists Program, we hired 51 percent women, 49 percent men. And the reason for that is that we have a draft from all over the world and we've hired, for instance, in that group a good number of Chinese economists - highly qualified, all Ph.Ds. from the best universities of the world. And guess what? They're all women.
MONTAGNE: Well, you yourself must have a great deal of experience with being the only woman in the room. And I gather that was even true when you were being interviewed to take over at the IMF.
LAGARDE: Well, yeah, that is true because the IMF has an executive board, which includes 24 members. And of the 24 people in the room, there were 24 men because the only female executive director was actually away on the very technical work that we do. And I can't do anything about it except talk about it and complain about it when I talk about it because those people are actually appointed by the various countries around the world that comprise the membership of the IMF.
MONTAGNE: You are so confident, that's quite clear. So, did you not run into discrimination...
LAGARDE: Oh, yes, yes, yes, of course. Yeah. When I started my life as a baby lawyer, I was interviewing with all the best firms then at the time, and one of them was, you know, probably the most reputable in France, and told me you can join us tomorrow and be an associate, be given great tasks and great files and great clients to work on, but don't ever expect to make partnership. And I said, you know, why would that be? And they said because you're a woman. And I said really? Well, you won't have me as an associate. And I went to another firm which was great and which was based on respect and on equal opportunity for those who delivered.
MONTAGNE: You were quoted once as saying that the financial mess would not have been such a mess if it had been Lehman Sisters instead of Lehman Brothers. What exactly did you mean? And does that apply - what you were saying apply, generally?
LAGARDE: I would repeat that. And I do believe women have different ways of taking risks, of ruminating a bit more before they jump to conclusions. And I think that as a result, particularly on the, on, you know, on the trading floor, in the financial markets in general, the approach would be different. You know, I'm not suggesting that all key functions and roles should be held by women. But if you look at the studies - and there were quite a few that were done by the Financial Times, by the Economist, by various financial observers of the market - it's apparently very clear now that those companies that have several female directors on their board and female in their top management actually do better, are more profitable, and give a better return to their shareholders.
MONTAGNE: Christine Lagarde, managing director of the International Monetary Fund. Thank you so much for joining us.
LAGARDE: Thank you.
(SOUNDBITE OF MUSIC)
STEVE INSKEEP, HOST:
Hey, we asked Christine Lagarde if she'd share a money lesson from her own life, and you can see her answer, and provide a lesson you've learned as well, on our Tumblr. Just search for She Works Tumblr. You'll find it. It's worth the search. Also, thoughts from Olympia Snowe, Neko Case and more. She Works Tumblr. This is NPR News. Transcript provided by NPR, Copyright NPR.