Blame it on the Beard

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I am very excited to begin exploring my topic regarding the effects of gender inequality on Wall Street! I strongly feel that the absence of women on wall-street was a contributing factor to the great recession.  The next steps in my research required me to ask the following questions:

1.)    Why are women absent on Wall Street?

  1. I found a great book in the library called “Selling Women Short: Gender and Money on Wall Street.” Although this book was written before the recession, and thus does not draw a correlation between gender inequality and the recession, it is very helpful in describing why women are less prone to achieve advanced positions in finance. It brings up the idea of “pay for performance” on Wall Street. Continue reading

Lehman Sisters?

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“Having too many men involved in business might cause them to take more risks, and having more women would probably be good in lots of settings. Women are the brake pedal.” – Economist Terry Burnham.

Has anyone ever noticed how much testosterone is on Wall Street? Men are everywhere! Do you think that if more women had held upper level management, including CEO positions, in financial institutions across the country, that the financial crisis would have been less severe? After shuffling through various articles on the Freakonomics Blog, I was directed to a piece from the New York Times opinion section entitled, Does Wall Street Need an Estrogen Injection? I found this article intriguing as it focuses on more sociological and less technical causes of the financial crisis (more in my area of expertise!).

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Multiple ways to attain a high share price

After seeing the negative consequences that occurred in the Enron scandal, many businesses have made an effort to change the way they operate in order to avoid similar results. Enron’s greatest downfall was that they focused only on attaining a high share price while failing to attend other important aspects of the business. There are other social, economic and environmental activities that could be measured in order to make positive impact on the business. Enron knew that their finances were being observed, measured and recorded by shareholders and Wall Street; therefore, they made all the possible changes or modifications in their financial statements to meet the high expectations of the market. As for the other activities mentioned, they could afford to slack off since they weren’t being measured. Seeing the negative effects by paying attention to this, there has been an effort by agencies to begin measuring these types of activities because they could become opportunities to create a sustainable business.  The Boston-based non-profit CERES formed The Global Reporting Initiative (GRI) in order to allow companies report their periodic social responsibility and environmental reports. The GRI was modeled after GAAP (Generally Accepted Accounting Principles) which is the standard framework of guidelines for financial accounting used in American companies. The GRI, on the other hand, has guidelines to measure environmental, social and economic reporting and give them the same importance as financial reports since these are aspects that could also influence investors. Eventually the GRI and GAAP could be combined to inform the company’s financial and non-financial outlook and make them both equally important for the success of the organization. In a wired world where people are better informed of the organizations activities, creating measurements for non-financial activities can also improve the share price of the company.