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The Wall Street Journal has had a flurry of great headlines lately: " Inside Fumbled Facebook IPO " and " JP Morgan Reveals 'London Whale'-Size Losses ." While reading these and other stories about the massive lossessurrounding the Facebook IPO and JP Morgan's hedging losses, Icouldn't help but notice how it was men who caused the vastmajority of these recent (and several past) problems. What ifFacebook's all-male Board of Directors had chosen a femaleinvestment banker to head up their ill-fated IPO? What if the"London Whale" or his male boss had been a woman? What if Enron'sbad boys had been girls? What if Nick Leeson, who ruined Barings,had been named Nicole? How many bonuses could Societ G n ralehave paid with the $7 billion blown by rogue trader J r meKerviel if he had been a she? I've written in the past about how hiring more women can reduce risk . Several studies have shown that women are more profitable investors , money managers and hedge fund managers , and they incur less risk in the process. A number of factors maybe at work here. Some researchers suggest this is because men tendto be more overconfident than women and when they succeed atsomething, they attribute it to their superior skills (rather thanluck). By contrast, women tend to attribute their success tooutside factors (rather than solely their own skills). Other research shows that women tend to be less optimistic than men, and higheroptimism leads to more aggressive risk taking. But many scholars pin the blame on testosterone. John Coates, aformer Goldman Sachs and Deutsche Bank trader turnedneuroscientist, documents his stunning research on brain chemicalsin his new book, The Hour Between Dog and Wolf: Risk Taking, Gut Feelings and theBiology of Boom and Bust . Coates and his colleagues at Cambridge University wired up agroup of traders and monitored their blood as they went about theirdaily business. They found that two hormones, testosterone andcortisol, wrought havoc in the bloodstreams of the male traders,causing them to take outsized risks during market bubbles.Conversely, during market crashes (and huge losses), the tradersbecame apathetic and excessively risk-averse. Coates' conclusionwas that trading rooms would be well advised to hire more women andolder men, both of whom ostensibly have less testosterone andcortisol coursing through their veins. This risky business also extends to the mergers and acquisitionsfield. It turns out that women are better shoppers. A recent study found that for every ten-percent of female directors on the boardof an acquiring company, the price paid (as a function of bidpremium) was reduced by 13.3 percent. In addition, women boarddirectors seem to go for smaller firms (less is more) and theyconsummate the deal more frequently. This is great news forcompanies who are on a shopping spree, since most acquisitions are wealth destroyers for shareholders of acquiring firms. And if you're wondering aboutthat ten-percent figure...The average number of members on acorporate board is 9.2, of which 16.1 percent are women (that is,one-and-a-half women per board). So, in this case, adding just one woman to the board could mean thedifference between a really stupid purchase and a decent purchase.Better yet, add two women to the board and you might even avoidbecoming the subject of an acerbic Wall Street Journal headline. This post first appeared on Forbes.com . Follow Dr. Sasha Galbraith on Twitter: /@sashagalbraith. I am an expert from kiosk-machine.com, while we provides the quality product, such as Wall Mounted Kiosk Manufacturer , Queuing Kiosk, Ticket Vending Kiosk,and more.
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