Today the financial industry is popularly stereotyped to be
masculine in nature – aggressively risk taking, fiercely competitive, motivated
by self-interest and seeking short term profits. It has made it only more natural to think that
men ought to be hired to fill the positions of such a masculine industry. Women
on the other hand are identified as the weaker sex being assumed as lesser competitive
and lesser committed to their careers.
It is being speculated that the financial crisis arose by
permitting young males to behave in an unregulated way. After the fall of
Lehman Brothers, a popular question was being asked - ‘What if it had been
Lehman Sisters?’ I feel that this question should be analysed
through the two contrasting point of views- ‘men and women are different’ and ‘men
and women are equal’.
On the onset though I would like to raise a few questions- do personal
behavioural traits of the individual employees affect the overall financial
industry in the first place? Towards this I feel a strong affirmative. I feel
that success of financial industry is marked by the combined balance of
economics, mathematics and behavioural finance. On a trading floor for example
the human instincts play as pivotal role as the statistical calculations. Next,
is it justified to analyse the topic in question through stereotypes? Over a
large population, often when trends begin to be observed, although it is okay
to analyse through the stereotypical averages it is still dangerous to suggest
that an individual will have the traits of its group. So even if we were to conclude
a definitive answer to our question through this approach, we still need to
understand that we would be limited by the huge intra-sex variability.
Men and
women are different
Having said that, I would now like to discuss the differences in
the traits associated with men and women. As mentioned above, men are seen as
risk taking, self-centred, competitive and impersonal. Conversely (and
relatively benevolently), women are seen as risk-averse, protective, altruistic
and warm. Women have also been observed to be more consistent long term
investors. To a large extent men and women are hard-wired differently though
evolutionary and cultural influences. It is tempting to picture that if there
were to be more women in finance, it would lead to a gentler and more stable
financial industry.
There are several studies that support this claim. In a 2009
article in Business Week it noted that according to
the research, from January 2000 through May 31, 2009, hedge funds run by women
delivered nearly double the investment performance of those managed by men.
Furthermore, in 2008, during the height if the financial crisis, on an average,
funds run by women were down 9.6 percent versus a a 19 percent decline in those
run by men. Audur Capital, an Icelandic private equity fund wholly managed
by women, is the only such fund to have made it through the crisis without a
hitch. On the other hand of the
spectrum, microfinance institutions (MFI) majorly turn to women to promote micro-lending.
Women are assumed to use the money to advance projects while the MFIs are typically
wary of what men might do with the money.
For benefiting from a large women workforce though, we would need
a more supportive social environment. An industry demanding long working hours
is practically a man’s world. It is ironic that in order for woman to be successful
in finance today, she has to dwindle down the very qualities that mark her as
feminine. Her emotional sensitivity, nurturing instincts and desire to spend
more time with children and family are the very reason that is keeping her down
on the Wall Street. So, to sustain a strong female workforce it is imperative
to promote more women-friendly schemes like on-site company sponsored child
care.
Men and
women are equal
On the other side of the coin, I personally feel that innately men
and women are equal and that the sex differences are widely exaggerated. Even
though both set of genders may express their reactions to a situation
differently, each of us is characterised by a common pool of emotions. For
example, after a stressful call on the trading desk, a man may throw off the
phone while a woman may resort to tearful sobs; but I feel that the inherent
lust for power or the sense of responsibility are equally strong in both. Also
as far as the quantitative skills are concerned both genders are equally
matched. It is wrong to assume that women are only good for cleaning up the
financial mess during a crisis and that men are excusable to create one.
To conclude, the topic at hand poses a broad number of questions
and to answer them we have to hypothesise
a number of stereotypical assumptions. In my opinion it is unfair to quantitatively
authenticate the loose qualitative popular images. But, still if we were to
assume that the Wall Street were to look at both men and women as equivalent participants,
certain characteristics commonly stereotyped as feminine (such as carefulness)
would be encouraged industry-wide, and inappropriate male-locker-room and cowboy-type
behaviours frowned upon, to the benefit of the industry and society.
