Will gender bias decide the next chief of State Bank?

FP : R Jagannathan Aug 14, 2013

It is always a good idea to have more choice of candidates when filling up top jobs. More choice, when the process is not vitiated by prejudice or secondary motives, should usually result in more competent individuals rising to the top.

So, in theory, the Union finance ministry would be right to demand at least two or three names on its short-list of candidates for the top job at the State Bank of India ( SBI) whose Chairman Pratip Chaudhuri retires next month.

According to a report in The Economic Times, the ministry wants to relax the eligibility criteria for the selection of the next SBI chief since the guidelines say that only those with at least two years of remaining service are eligible for the post. Since there is only one incumbent who meets these eligibility guidelines, the ministry wants to expand the choice and has asked the Department of Personnel and Training (DoPT) under the Prime Minister’s Office to relax the guidelines.

Chairman Pratip Chaudhuri retires next month. Reuters

Nobody should ordinarily object, except for this simple fact that the only person currently eligible for the chairmanship is a woman – Managing Director Arundhati Bhattacharya. Relaxing the guidelines would bring in one more candidate, Managing Director A Krishna Kumar.

According to ET, Bhattacharya will be eligible to continue in office till March 2016, while Krishna Kumar will be out by November 2014 – a tenure of just over a year and two months. That itself should rule him out, but the finance ministry obviously wants to change the rules.

Changing the norms just when a competent woman is about to get the job can be construed as subtle gender discrimination, even if that was not the intent.

Here’s why this move sucks.

First, in state-owned banks like SBI, the top job usually goes by seniority and not necessarily terrific merit. When this has been the case all along, there is nothing in Arundhati Bhattacharya’s CV to render her incapable of performing the job competently. If SBI had all along been open to lateral recruitments, this argument would not hold, but that is manifestly not the case.

Second, even assuming it is a good idea – and it is – to make more people eligible for consideration for the post, the right way to do it is to make the rules clear for the next time. The rules can’t be changed just when Bhattacharya is about to get the job by being the only one eligible. It is not her fault if the rules now make her an obvious choice; changing the rules now would certainly give rise to charges of gender discrimination.

Third, the expansion of the list to include Krishna Kumar does not amount to any improvement in choice – since it only means that someone with a longer tenure will be pitted against someone with a shorter one. This is hardly going to make an earth-shattering difference to SBI’s performance over the next couple of years. A real difference would be if the next SBI chief is given a clear five-year mandate, as OP Bhatt got in 2007. But this not is not even being contemplated.

Shades of misogyny have also been alleged in the choice for the next US Federal Reserve Chairman, where the choice is said to be between Janet Yellen, Deputy Chairperson of the US Fed’s Board of Governors, and Larry Summers, economist and professor at Harvard’s Kennedy School of Government. While Yellen, 67, is widely thought to be sympathetic to the idea of continued monetary easing, Summers, 58, is thought to be more open to withdrawing the stimulus at early signs of an economic turnaround.

The gender attacks against Yellen began with the lesser-known New York Sun, which published an editorial against Yellen under the heading “The female dollar”. It argued that a “gender-backed dollar” is not going to be of much help “in an era of fiat money? The debate about the next Fed chairman has been conducted absent any attention to the question of whether America, or the world, is being well-served by a system in which the nation’s money is convertible into nothing other than other pieces of fiat money.”

The Sun obviously wants a macho dollar, where Yellen does not quite fit the bill.

Unfortunately, the Wall Street Journal also waded into the controversy as it does not like Yellen’s economics. It hit out against using the gender argument to get her into the job. It wrote: “The current Fed Vice-Chairman has emerged as the favorite of the Democratic left. As an economist with long experience at the Fed, she doesn’t lack for professional credentials. But her cause has been taken up by the liberal diversity police as a gender issue because she’d be the first female Fed chairman. Nancy Pelosi has bellowed her support, and Christina Romer, who was chief White House economist for the first two years of Mr Obama’s Presidency, has all but said it would be a defeat for women if Ms Yellen doesn’t get the Fed job.”

The issue is murkier in the US because there is a right-left political divide and a liberal-conservative gender issue muddying the waters.  Hence Paul Krugman backs Yellen for both reasons, economics and gender biases. He wrote in The New York Times: “Both anti-Yellen campaigns, then, involve unmistakable sexism, and should be condemned for that reason. As it happens, however, both campaigns have another problem, too: They’re based on bad economic analysis. In the case of the ‘female dollar’ types, the wrongheadedness of the economics is as raw and obvious as the sexism. The people shouting that the Fed is ‘debasing the dollar’ have been warning of runaway inflation any day now for almost five years, and they have been wrong every step of the way.”

Krugman’s economics need not detain us here, but clearly there is subliminal sexism at work here – on both sides of the right-left divide.

In our own Arundhati Bhattacharya case, however, there is no question of her views on the economy or on how to run the bank being any different from Krishna Kumar’s. Or any other candidate. When you run a state-owned bank, there is no big difference.

That leaves us with the option of unstated gender bias. It is difficult to believe that the finance ministry is consciously biased against Bhattacharya; however, why then change the rules after the game has begun?