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Are Women the Antidote to the Financial Crisis?

Are Women the Antidote to the Financial Crisis?

I don’t know about you, but watching yesterday’s Bank CEO’s testify in front of Congress was extremely satisfying if not entirely useful. And have you noticed that every CEO or executive appearing before Congress has been male?  I have, and I’m not the only one.

Would having more women in senior executive positions in the financial industry have prevented the world-wide financial crisis we are current experiencing?  It’s a question worth asking, and according to a Washington Post article published yesterday, that question is being asked by government officials, economists and everyday citizens in several countries whose economies have been effected by the behavior of so many “alpha males” who dominate the financial industry:

As the global financial crisis deepens, the first rumblings of a gender revolution are underway in an industry long controlled by men.

Banks, hedge funds and other financial organizations that have led the international economy’s downward spiral are overwhelmingly male-dominated. The regulators and legislators assigned to oversee the financiers are also mostly men.

“There are quite a lot of alpha males with testosterone steaming out their ears,” said Stuart Fraser, one of London’s top financial sector officials.

Michel Ferrary, a professor at the business school Ceram in France, believes that gender balance is the key to taming the culture of risk-taking that has dominated the financial sectors of many nations.  Ferrary recently conducted a study in which he found that banks with greater gender balance have navigated the economic crisis far better than banks with less gender balance.

While I’m never a fan of the kind of essentialist thinking that presumes women would behave better or more morally in situations simply because they are women, challenging ourselves and our culture on the issue of gender balance in the workplace can only help mitigate the alpha male behavior experts and officials are criticizing today. Not only would greater gender balance add new voices and perspectives to boardrooms and C-suites in all industries, greater gender balance also has the potential to counteract the unhealthy culture of risk prominently on display in yesterday’s Congressional hearings. 

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17 comments

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8:57PM PDT on Jul 14, 2009

I would say yes but not because men are naturally more likely to be deceitful. What we have here is a traditional social structure that creates systems of brotherhoods. So of course if you have a sort of gentleman's club thing going on they will be more likely to keep secrets that they shouldn't simply because the tradition is so well rooted into the upper social structure.

Most families also tend to raise boys differently that girls. We should examine this and take responsibility for future outcomes based on the importance of ethics we emphasize on both genders of our children.

2:25AM PST on Feb 22, 2009

Female directors deserve more credit (continued article)
The study examined a sample of Australian firms & the results suggested a positive association between women directors & economic and social performance.

However, the Australian Census of Women in Leadership, released recently, showed that at board director level there were more than 10 men to every one woman in the ASX200.
Dr Galbreath said researchers had studied the link between women directors & firm financial performance in previous studies, but research examining women directors & sustainability had been scant.
“Studying only the links between women on boards and financial performance ignores other important organisational outcomes. In the current climate, financial performance is no longer the sole criterion for valuing firms in the market; environmental and social performance is also important,” he said.
Dr Galbreath said the study provided a roadmap for more focused examination of these relationships.

“Studying board structure is critical because it lends understanding to the roles of boards & how these roles impact on organisational performance,” he said.

Dr Galbreath is now undertaking a new ARC-funded study examining the link between corporate governance and sustainability. This research will lead to findings that will help companies structure their board in a way that can help improve sustainable performance.

"

Curtin Uni press release

2:16AM PST on Feb 22, 2009

This is some recent Australian research. (I just found it while cleaning up my hard drive). It may interest people reading this thread/topic
"
Female directors deserve more credit
Thursday, 20 November 2008
Curtin University

Study results suggested a positive
association between women directors and
economic and social performance.

Women board directors may help improve sustainable performance, according to new Curtin University of Technology research.

The paper by Curtin’s Graduate School of Business Research Fellow, Dr Jeremy Galbreath, shows women possess critical skills and attributes that are beneficial in developing a balance across financial, social and environmental business outcomes.

“Appointing women to board director roles adds diversity and fresh perspectives to decision-making and improves information processing, which is particularly valuable as firms face the strategic challenge of demonstrating balanced performance across sustainability outcomes,” he said.

“There has been a call for more women on boards for many years and in the face of the challenges of sustainability, evidence from this research is significant for management researchers and practitioners.

“According to the findings of this research, firms in Australia may, in fact, be able to perform better by having women serve on the board.”

The study examined a sample of Australian firms and the results suggested a positive association be

11:51AM PST on Feb 14, 2009

Perhaps grade school and high school classes in ethics, compassion and the disadvantaged of the world would curb the greed and consumerism of young people....male and female. Also having them work with the disadvantaged for a certain period of time before they could graduate high school. Maybe they would remember these lessons when they enter the working world whether it's working at a fast-food restaurant or as a corporate executive. Just a thought.

11:11AM PST on Feb 14, 2009

About women's style of communication versus men's, women may be able to be more physically observant but they also more catty and competitve amongst each other than I see men do. Women who aren't as physically attractive see women who are in the workplace as a threat - the immediately assume they sleeping with someone to get ahead which is NOT always the case but it is assumed just because of looks. Also if a woman is smart and pretty - that isn't supposed to be possible either and woe to the woman who is because she will be visited by all sorts of unfair abuse and calumny and underhandedness. I read an article recently that said studies show that workplace bullying is most often done by ... drumroll ... women. I think this is because of the catty stuff that a lot of women don't ever get over.

To also speak to Michael's comments about influence, I was raised with two brothers and no sisters and no neighbors (we lived in a more rural area). I truly believe that ultimately affected my communication style greatly. I am MUCH more direct in communication approach than most women I know and I don't care about competing like a lot of women in the workplace I have met. I think the same might happen to guys with a bunch sisters and no brothers.

I truly believe that communication style is much to the heart of the issue at the issues with gender in the workplace. If I were to name one significant factor alone - I would say that was it.

11:03AM PST on Feb 14, 2009

I agree with the men saying women end up becoming pseudo-men to work in male dominated fields. It is the only way they allowed in. How do I know? I work a male dominated profession - computer technology.

Reason I posted against Patrick's comments is that he claimed a bunch of positive traits to men that I have not seen many men exhibit. I have met men from EVERY walk of life and once I get them talking - they exhibit none of those traits he claimed belonged to men. And that is NOT generalizing. They are always deviants from the norm, but the norm still exists.

I also would not claim mothers as the sole influences in the male growing up. I think peer influence and lack of male father influence can important factors. Sometimes, w/o a good father they try to hard to be alpha-male in order to prove masculinity.

And practical is not the same as pragmatic. I know guys to practical - pragmatic however - no.

I agree with Michael that we have to beware of the influence the media (particularly advertising) has over influencing and molding us. That begins VERY early these days. I personally do everything I can to fight it and am quite proud to be Madison Avenue's worst nightmare in my behaviors and choices. Whatever the say to buy - I usually don't.

I agree with Michael also about the communication differences between men and women which I think is the biggest thing. But that can be a bonus point or not. There is much in women's com. that I don't like.

10:24AM PST on Feb 14, 2009

I agree with Thomas L. Robinson and was planning on responding the same way. The female gender (worldview, culture, thinking style) would be a benefit to most workplaces. However, male culture dominates in such a way that simply having women in positions of power doesn't help. Those types of women don't get to feel, act, and express themselves like women for fear of being disrespected, belittled, and appearing soft and weak. It shouldn't be that way, but it is.

I'm all for sex equality in the corporate world. But sex equality doesn't necessarily imply the more important idea, gender equality.

The corporate world itself must change and be reformed. They like how they've been doing things so far so we're in for a very tough fight.

More than anything, I thin the issues that have manifested in the corporate world are as follows:

1. A belief that economic models are reality. Also a misunderstanding of how economic models probably don't apply to industries protected by lobbyists and US government involvement.

2. Greed.

3. Poor understanding of their own actions. The managers simply aren't smart enough or responsible enough.

4. Businesses are punished rather than encouraged for taking a long term, socially responsible approach toward their businesses. The most important thing is quarterly profit information. Everything else is turkey.

11:40PM PST on Feb 13, 2009

It is impossible to generalise there is a continuum of traits across maleness and femaleness.

However i do think the hierarchical structures of corporations suit men better (copied from the Roman legions and the Catholic Church-need I say more).

I agree with Thomas in that it is sad to see a woman become a psuedo-man in order to break the glass cealing

I disagree about men not being inventive and practical. The sub prime rip-off was a genius of an idea that made a lot of people rich.
Men seem to take out the most patents than women if that is one way of judging inventiveness.

Practical? Why yes" let me get my hands on as much money as I can."

Perhaps money =prestige and 'Alpha maleness'.
But equally to I see magazines devoted to women wearing $20,000+ designer gowns and millions in jewellery. many women do tend to want to marry an Alpha Male.


There does seem to be a differnce in communication styles and awareness. Men leaning a little to the Asperger's side of the personality spectrum and women more aware of nuances of body language and voice tone. Skills that could be useful, in a less structured corporate setting, where communication was valued. (along with people)

If men are bad at communicating, selfish, risk-taking, aggressive, self centred, egotists; who brought them up?-Mothers=women.
Many mother's I see are blind to their son's faults and 'he can do no wrong' in their eyes.
When I was first married my wife had to teach me how to use a br

10:15AM PST on Feb 13, 2009

Not if the women were pseudo-alpha males as is often the case within our current male dominated systems . It's been a long, slow, struggle towards gender equality and all that that implies. It can be achieved and many here care2 make it so.

10:05AM PST on Feb 13, 2009

To Patrick:
"Men's strengths lie more in other areas such as pragmatism, inventiveness, and perhaps negotiation, but women's strengths are very much more undervalued - including that of patience."
- Men pragmatic? I don't think so and I don't think any of the CEOs that have testified showed any "pragmatism" either. I also don't think men are all that inventive. From my own experience, men tend to be creatures of habit more than women by a long shot. They don't like their boat rocked either - inventiveness, change is not their element. So all these things you attribute as "male" traits - are not male traits. My experience from all men in many walks of life from execs down to farmers is this - they are creatures of habit, set in their ways once they have decided what their way is going to be and very UNWILLING to consider other ways (hardly inventive of them) and they are not good negotiators - rather it is usually their way or the highway brand of diplomacy (Bush style). I would say all the traits you consider to be "male" traits are much more WOMEN'S traits - not men's. And I would have to say that Bush style very much describes the current Financial industry's CEO style - set in their ways, unwilling to change, not holding themselves accountable to anyone and complete lack of negotiation skills.

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