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Deborah Kolb
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Deborah Kolb

Deborah M. Kolb is Deloitte Ellen Gabriel Professor for Women and Leadership at the Simmons School of Management and author, most recently, of Her Place at the Table: A Woman's Guide to Negotiating the Five Challenges to Leadership Success.

Are Women Really Risk Averse?

The conventional wisdom is that women are more risk averse than men and so might have been less likely to promote and support the kind of risk-taking culture that seems to have led to the current financial crisis. However, research conducted at the Center for Gender in Organizations at the Simmons College School of Management in Boston suggests that this conclusion needs to be seen in a more nuanced way.

By the standard means of testing, women do seem to be more risk averse when making risk/reward trade-offs. But when risk is understood more broadly, women seem as likely as men to take risks like launching new products or starting new projects.

Certainly, some of the bankers who oversaw the development of the now-demonized financial
products were women -- like Zoe Cruz at Morgan Stanley, for example -- although they are obviously not as well represented in those ranks as their male colleagues (holding less than 40 percent of the jobs on Wall Street). So from that perspective, we might not have seen any differences.

However, a further finding of the study is that women tend to take the broader context into account in making decisions that entail risk to them and their organizations and are more attuned to see changes in support for such actions. So it is possible that having women in leadership roles might have lessened the severity of the crisis, because women might have begun to appreciate its consequences sooner and as regulators they might have taken action more swiftly.

By Deborah Kolb

 |  March 8, 2009; 10:18 PM ET
Category:  Women in Leadership Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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aha, I recently re-read "Economics in One Lesson" by Henry Hazlitt -- a New York Times economics editor. He writes about good economists, who promote policies designed to benefit the whole of society vs. special interest groups. And good economists consider long-term policy outcomes along with short-term goals. Both of these principals have been forgotten by recent misbehavior amony Wall Street, banks, and congress. Hazlitt's observations track with the conclusions of the study cited in this article.

In The Triple Bind, psychologist Stephen Hinshaw and Rachael Kranz observe society's messages for adolescent girls. In many ways, today is the best time in history to be a girl: Opportunities for a girl’s success are as unlimited as her dreams. Yet an alarm is sounding, revealing a disturbing portrait of the stresses affecting girls of all ages. Societal expectations, cultural trends, and conflicting messages are creating what psychologist and researcher Stephen Hinshaw calls “the Triple Bind.” Girls are now expected to excel at “girl skills,” achieve “boy goals,” and be models of female perfection, 100 percent of the time. The Triple Bind is putting more and more girls at risk for aggression, eating disorders, depression, and even suicide.

We see these same risks at work in Wall Street.

Posted by: rmorris391 | March 9, 2009 3:24 PM
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