Panel on “Transforming Institutions by Investing in Human Talent”

Building Sustainable Microfinance: The Global-Local ExperienceWomen’s World Banking

March 1, 2013

Addressing Critical Leadership Gaps in the Industry

“The risks associated with poor management have always occupied a high place in [The Banana Skins] survey. … People see MFI management falling behind

the rapid changes in the microfinance industry.” 1

[1] Microfinance Banana Skins 2012: Staying Relevant, Centre for the Study of Financial Innovation, 2012

Building experienced, principled leadership for microfinance

Supporting meritocratic institutions committed to equal opportunity

334Graduates from 132 MFIs in 63 countries

5Leading MFIs supported through the Institutional Support for Gender Diversity

2Recipients of the Excellence in Leadership Award

43 CEOs trained63% of participating institutions have sent participants to multiple programs

Participants by Region

Center for Microfinance LeadershipResults to Date, 2009 to 2013

Data as of November 27, 2012

Leadership Development Matters in Microfinance Investing in Leadership to Champion the Double Bottom Line, Innovation

Sustainability requires highly effective leadership. Microfinance leaders must possess a broad range of strategic and managerial skills in order to grow sustainable institutions that have impact.

Championing the social mission means being armed with a vision, and some formidable skills to go with it.Principled leadership is essential for stemming the tide of mission drift, which can be seen across markets. Leaders need to be committed to their mission, and have the skills and foresight to know how to protect it.

Innovation requires strong leadership and management.

For innovation to be successful, visionary leadership must embrace the innovation, and skilled management must capably steer the organization through the challenges of change and implementation.

Gender diversity is an essential ingredient for innovation.Microfinance providers must shift their perspective towards gender diversity from an elective initiative to a fundamental component of an innovative institution.

Double Bottom Line Innovation

The Center’s Approach to ImpactIt Begins with Building Awareness, Influencing Behavior

Awareness

Our programs build leaders’ awareness

about:

•the power of flexing new leadership styles•the need to incorporate new leadership behaviors in their ‘toolbox’

Behavior Change

Individual leaders report:

•Better delegation and teambuilding•More inclusive management styles•Enhanced communications with colleagues: win-win negotiation, openness to feedback

Institutional Impact

Institutions report:

•Ability to meet tough new financial goals•Implementation of new initiatives (projects on risk management, trainings for product innovation, branch openings, changes to HR practices of hiring and recruitment, etc.)

The Center has trained 334 microfinance leaders and practitioners from 132 MFIs in 63 countries since 2009. Their personal transformation is catalytic.

Addressing Critical Leadership Gaps in the Industry

“The risks associated with poor management have always occupied a high place in [The Banana Skins] survey. … People see MFI management falling behind

the rapid changes in the microfinance industry.” 1

[1] Microfinance Banana Skins 2012: Staying Relevant, Centre for the Study of Financial Innovation, 2012

Building experienced, principled leadership for microfinance

Supporting meritocratic institutions committed to equal opportunity

The business case for gender diversity posits that organizations that successfully recruit, retain and promote women will benefit from these efforts,

not only in terms of “social returns” but also financially.

The Business Case for Diversity Why Workforce Diversity Matters for Microfinance

Decision Making by Diverse Groups

Diverse perspectives lead to stronger decisions and healthier, more vibrant institutions.

Mirroring the Market

Women’s voices in decision making on the design and delivery of products is important when a majority of clients are women.

Impact of Role Models

Clients often speak of the inspiration they derive from seeing powerful women leaders in the organizations that serve them.

A study of Fortune 500 companies - companies with the highest representation of women in top management experienced better financial performance than companies with the lowest women’s representation.

• Return on Equity (ROE) - 35 percent higher• Total Return to Shareholders (TRS) - 34 percent higher

What Explains the Correlation? Prioritization of gender diversity can be a proxy for other positive determinants

of financial performance:• Innovation• Employee satisfaction• Customer loyalty • An inclusive and supportive work environment.

The Business Case for Diversity Correlation between Diversity and Performance

Source: Catalyst, The Bottom Line: Connecting Corporate Performance and Gender Diversity, September 2004

Gender diversity alone is not a cause for an improved bottom line, but rather a symptom of a healthy, vibrant organization.

Our Mental Models Sometimes Defy the Data

Women professionals

Primary role in the household

Women employees are more likely to

leave the organization

than men

Mental ModelsWhat the Data Tells Us

Building Blocks to Support Diversity

Leadership

Statements and Policies

Organizational Culture

Monitoring

Using data to challenge bias

Policies to Support Work-Life

Integration

Talent Management Operations