There’s a long piece by former retail stock analyst Margo Epprecht in Quartz today debunking the myth that the absence of female CEOs on Wall Street is a result of their opting out. According to her, the real problem is that women have to work extra hard and keep their heads down in order to prove they deserve a seat at the table with the boys. So once a downturn hits and the illusion of meritocracy dissipates, they’re much easier to lay off than the “politically savvy,” “well-connected” guys who schmooze. Then in the next bull market, Wall Street “became the ideal petri dish favoring risk and consequently, favoring men” (we all know how that worked out), a culling process she calls “unnatural selection.”
“In the 1970s and 1980s, broker-dealers abandoned private partnerships in order to raise outside capital and grow. As firms merged or went public, risk became institutionalized while rewards were paid out to profit generators. A 30-year period of steadily declining interest rates meant that taking risk became the best way to make more money from money. Giant bonuses fed a cycle of arrogance that flushed out the naysayers.
Indeed, in extensive research on “decision traps,” men appear more susceptible than women to what is called an “overconfidence bias.” “The evolution of overconfidence,” a 2011 study published in the science journal, Nature, concluded that “overconfidence maximizes individual fitness…as long as benefits from contested resources are sufficiently large.” “Sufficiently large” could well describe bonuses in the tens of millions of dollars to individual Wall Street traders and bankers. The cost of poor judgment to any individual: often no worse than dismissal with a generous severance package. Over the years, many cooler heads on Wall Street, men and women alike, found they were just not picked for the team.”
But judging from all of the other women in the story, who were pushed out of Wall Street and landed at boutique firms and consulting gigs where they don’t have to work 80 hours a week and won’t be denied promotions because they have children, you might not want to play for that team anyway.