If Women Ran Wall Street, Would We Be in this Financial Mess?

The majority of my married female friends manage the family finances. As far as I can see, they're all solvent.

"That's a cute little anecdote," you're thinking. "But what does that have to do with the price of eggs?"

A great deal...once you realize that some of the finest international economic minds recently discussed whether or not women are better money managers. This happened not at the corner bar, but at the World Economic Forum in Davos, Switzerland, which ended just over a week ago.

New York Times op-ed columnist Nicholas D. Kristof shared his observations of the annual event in "Mistresses of the Universe" and what the implications are for Wall Street:

...[S]ome of the most interesting discussions revolved around whether we would be in the same mess today if Lehman Brothers had been Lehman Sisters. The consensus (and this is among the dead white men who parade annually at Davos) is that the optimal bank would have been Lehman Brothers and Sisters.

Wall Street is one of the most male-dominated bastions in the business world; senior staff meetings resemble a urologist’s waiting room. Aside from issues of fairness, there’s evidence that the result is second-rate decision-making.

“There seems to be a strong consensus that diverse groups perform better at problem solving” than homogeneous groups, Lu Hong and Scott E. Page wrote in The Journal of Economic Theory, summarizing the research in the field.

Hey, no surprise there. Even the most cursory glance at information on women's leadership styles indicates that we are all about collaboration and demonstrate an inclusive team-building style.

Kristof's op-ed has even more fascinating details about male behavior on Wall Street and how it's gotten us into trouble. One compelling tidbit - a study that examined the saliva of male traders to ascertain the amount of testosterone present, and concluded that higher testosterone meant higher profitability for the day. Kristof also points out that men on Wall Street often succumb to peer pressure which causes them to make high-risk bets.

Women, he adds, are impervious to this kind of thing.

Related article: Qualities of Women Leaders

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