RSS Feed


More Articles: Latest Popular Archives

"Macho" Risk-taking culture at the heart of the financial crisis, say Business Executives

Contributor: |


The ‘macho’ culture and male-dominated working environment in many City firms caused excessive risk to be taken and lies at the heart of the financial crisis, according to research by The Aziz Corporation, the UK’s leading independent executive leadership and development consultancy. In the research examining business views on the causes of the financial meltdown, 89% of executives agree that a culture which ‘encouraged and rewarded the taking of excessive risk’ contributed to the current financial crisis, while 83% believe that the failure to understand the risk that many financial institutions were running was fuelled by the “macho” culture of many City firms. 

According to the research, nearly three-quarters (74%) believe that in the recent boom, any senior executive advocating caution would be regarded as ‘wimpish’ or lacking in competitive drive.  Business executives clearly believe that the gender balance in City institutions lies behind the risk-taking culture. Seventy seven per cent argue that the gender balance affects the culture in any working environment, and 93% that the management of major financial services firms is dominated by men. 

Amongst business executives there appears to be a consensus that men are more likely to take risks. 54% agree that men are more competitive than women, while 61% believe that women tend to be more cautious and risk-averse than men. Fifty five per cent agree that, in general, women are more likely than men to apply ‘common sense’ to apparently complicated situations. Almost half of respondents (49%) and a majority of those working in financial services (53%) agreed that having a greater number of women in senior positions in financial institutions could have prevented at least some of the excesses which have caused current problems. 

Professor Khalid Aziz, Chairman of The Aziz Corporation, explained: “The business community has clearly registered that a risk-taking culture was a major factor in driving many financial institutions to the brink of collapse, and that the macho and male-dominated working environment of City firms lay behind that culture. Politically incorrect though it may be, the fact is that men and women are different. There is now some accepted evidence of different personality traits and attitudes to risk.

The survey reveals a recognition that a new era of caution and sobriety is now required of the financial services industry. Eighty five per cent believe that, in a business where the temptation to act irresponsibly for short-term gain is always present, City firms need more staff able to exercise ‘cautious judgement’. However, there are concerns that finding such staff may be difficult.  Sixty seven per cent believe that those who thrive in the cut and thrust of the boom tend to lack the skills necessary to manage a downturn.

It is widely recognised that women have struggled to climb the career ladder in major financial institutions. Eighty six per cent agree that it is more difficult for women to rise to senior positions in City firms. Perhaps unsurprisingly 95% of women also believe this, but it is of note that 89% of those working in financial services believe the glass ceiling is a reality in the City.

The research reveals a telling insight into how those few women who have risen to the top in the City have managed to do so. Seventy two per cent of respondents, and 80% of women, said that most women who have succeeded at high levels in business or the City have accepted and played along with a masculine culture rather than challenged it.

Professor Khalid Aziz concluded: “While the glass ceiling has been much talked about over the last decade, nothing has been done to dismantle it. Many firms have regarded it as a mere matter of political correctness that can be safely ignored.”   


Human Resources news brought to you by theHRDIRECTOR – the only independent strategic HR publication.

Receive more HR related news and content with our monthly Enewsletter (Ebrief)