Culture of Risk is Still at It!

I’m often asked whether having more women in positions of power in the big financial services companies implicated might have prevented the risky and grandiose wagers that led us to disaster. After all, a Cambridge University study famously linked high risk trading behavior to surges in testosterone. In addition, the trading units and hedge funds most implicated in the continuing meltdown are precisely those units where women are most underrepresented.
But I think this equation is too simplistic. Instead, the under-representation of women in senior positions in the companies most implicated was both a consequence and a symptom of a leadership culture that had grown wildly unbalanced.
I couldn’t help but think of this when I read the NY Times’ piece today on derivatives traders (last week!!) “relaxing” at an over the top strip club during a big conference in San Francisco.  How comfortable is a woman really going to feel in a culture where this sort of thing is routine? Most women flee such an environment, and the all-male culture left behind tends to tolerate the kind of behavior that exposed all of us to a world of woe.

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