A recent Bundesbank study has found that women make riskier bankers than men, casting doubt on the many calls for more female bank executives. Could this be true?
The Bundesbank conducted a study on women in banking and came up with the conclusion that women make riskier bankers. The study looked at board changes at banks which resulted in a higher proportion of female representation. In analyzing their findings it appeared that the women in the study tended to be significantly younger and less experienced than their male counterparts—and that translated into greater risk taking.
Amazingly, or some might say wisely, the Bundesbank was quick to disassociate itself from the findings of the survey which the institutions itself had commissioned. On the other hand, many who have long-called for more women in banking would have been both disappointed and discouraged if this were indeed the truth.
So there is a need for Clearing The Bull on this particular story.
Having spent more than twenty years in investment banking I have witnessed, both directly and indirectly, how testosterone and giant male egos created oversized and unwieldy organizations with little strategic logic, and how these organizations eventually imploded. Being a Star Wars fan I have called this approach the Death Star strategy—one which deems market size, market power and position in the product league tables as the be-all and end-all of profitability and competitiveness.
Too Big To Fail or TBTF as it is known is a byproduct of these Death Star strategies.
As such, there is no doubt that women would and can make a difference in banks. The question therefore is how to explain the findings of the Bundesbank survey. The answer is very simple.
The problem with women getting to the top in banking or any other business for that matter is that they have to do so within the confines of a male-oriented culture. What this means is that in order to get ahead, many women believe that rather than behaving like women, they have to behave like men. This means being tougher, more aggressive and yes even riskier than their male counterparts.
One could call this the Margaret Thatcher syndrome.
As such, we should not be surprised at the findings of the Bundesbank survey as we should not have expected anything more than this false positive. In order to get the best out of women and the natural qualities that they possess, we have to create banks and organizations in general that allow women to be whoever and however they want to be. More specifically, what this means is cultivating gender neutral environments.
The evidence suggests that banks in particular have some way to go in achieving this.
Only when organizations create the right environment, and judge women on their merits as women and not by the yardstick of men, will they be able to fully take advantage of the specific qualities and benefits that women bring to the workplace. Until then, studies like that commissioned by the Bundesbank will continue to give the wrong impression.
Jonathan Ledwidge is the author of the book Clearing The Bull: The Financial Crisis and Why Banks Need a Human Transformation. Use this link to give your opinion on the performance of banks post the financial crisis.