Clem Sunter

Lehman Sisters

2010-08-25 13:15

Sometimes a quote in a magazine hits you right between the eyes. This one was contained in an article by Bruce Crumley in Time magazine on the boardroom revolution. It was attributed to Ruth Sealy, senior research fellow and deputy director of the International Centre for Women Leaders at England’s Cranfield School of Management.

She said: “We’ll never know if Lehman Brothers might have avoided collapse if it had been Lehman Sisters, but a wider range of perspectives and opinions in its leadership would have made it less likely that inordinate risk and bad decisions would have been taken.”

Ping! Two questions immediately came to mind:

1. Are women naturally more risk-averse than men?
2. Are men in the company of women more risk-averse?

My answer to the first question is that I don’t think appetite for risk differs between the two genders. When men ignore risk, it’s usually bravado and when women ignore risk, it’s usually passion. But sometimes you get a woman like Maggie Thatcher who demonstrated extreme bravado with some of her decisions; and sometimes you get men who throw caution to the winds because they are passionate for a woman or a cause.

Equally, if you go into any casino, you see as many women at the slot machines as men. Women are probably more cautious drivers, but men tend to be more analytical in deciding the best option in a difficult situation. Women more often act on impulse which is why they are targeted in advertising campaigns for any fast-moving consumer product. Men have less ability to adapt.

I know that if I say any more on this first question, I shall be accused of stereotyping the sexes. So I shall conclude that individuals – irrespective of whether they are male or female – have their own special mix of conservatism and recklessness.

The second question is the one that interests me because I think the answer is yes: men are far less “blokish” in the company of women than if they are solely in the company of men. It applies equally in bars and boardrooms. The difference between the first and the second locality is that an all male situation does not usually matter in bars. All that happens is that the stories become more exaggerated. Obviously, if it increases the risk of driving home drunk or ending the evening with a punch-up, it does matter.

However, boardrooms are where money is discussed and investment decisions are made. A bunch of men, suitably intoxicated with power and position, can collectively take extraordinary risks. I wonder how many women were on the board of Enron when it failed; or on the boards of all those banks who accumulated ridiculous losses by gambling on derivatives.

I have my own experience too. I served on a board for many years which had no women. The mining industry till recently was an all male affair. The introduction of one woman onto the board in the early 1990s transformed the conversation and, as was mentioned in the quote, broadened our perspective on many issues.

Hence, the gender composition of the board is a very good indicator of that board’s attitude to risk management, the extent of its radar system in picking up turning points and trends, and the richness of the conversation that takes place before critical investment decisions are made. It also means that the company is more likely to abide by the rules of corporate governance. Nevertheless, the quality and integrity of individual directors remains paramount.

Send your comments to Clem

Disclaimer: News24 encourages freedom of speech and the expression of diverse views. The views of columnists published on News24 are therefore their own and do not necessarily represent the views of News24.

X
NEXT ON NEWS24X

SHARE:

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
9 comments
Comments have been closed for this article.

Inside News24

 
/News

Book flights

Compare, Book, Fly

Traffic Alerts
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.