Are Women Risk-Averse in Money Matters?
Feministing is reporting on a recent study that looks at gender differences as they relate to risk and money.
The National Council for Research on Women has a new report out called, Women in Fund Management: A Road Map for Achieving Critical Mass – and Why it Matters, that argues that diversifying the leadership at the highest levels of the financial sector will ensure a more secure financial future for everyone. They call it the “critical mass principle.” The report’s lead sponsor was long time financial superwoman Jacki Zehner, who wrote a really interesting commentary on her experiences in the sector and her hopes for the future on Huffington Post when the economy sunk.
Courtney goes on to summarize some older studies that might shed some light on the subject.
A 2005 study from the Center for Financial Research at the University of Cologne documented differences between male and female fund managers: Women managers tended to take less extreme risk and to adopt more measured investment styles (which perform well over time). And according to research published in 2002 in the International Journal of Bank Marketing, women tend to make investment-related decisions with a detailed, comprehensive approach, while men are more likely to simplify data and make decisions based on an overall schema.
Courtney’s findings reminded me of a post I did a few months ago about an article in the Boston Globe asking these very questions. Is there something inherently biological in women that makes them risk averse, or is this socialized behavior? If it’s socialized, why aren’t we teaching boys (who grow up to be men) to me less willing to take risks. Sure, risk-taking is a big part of going into business or politics. But there’s good risks and bad risks. And the important part is being able to decipher which is which. I don’t want to entrench biological essentialism and say that having more women on the board will automatically lead to better decision making in the financial world. But honestly, the men on these boards have done a pretty good job of fucking things up – royally – so why not try something different for a change?
Serena: This is interesting, because a few years ago, there was a lot written about women not taking enough risk. For example, see this article about how men and women think differently about money:
So yes, there are good risks and bad ones, but most people make money by taking some risk!