Thursday, February 18, 2010


At a recent practice interview session for students at a nearby college, volunteer alumni/ae were talking around the dinner table, introducing each other and their backgrounds. At my turn, I mentioned that I had written a book about "women in leadership at corporate boards of directors at Fortune 1000 firms based in California." The woman sitting opposite me, about my age, said,

"Oh, yes. The Glass Ceiling."

I felt as if someone had just picked up some huge carcass of road kill and dropped it in the middle of the table.

Trying to be diplomatic, I said how very proud I was that I’d managed to write a book of over 260 pages, studying 114 women in leadership, and writing up the biographies of 15 very talented women, and never once used the expression "the glass ceiling." Nor did any of the women whom I interviewed ever use the phrase.

Also at the dinner table were two younger, more recent graduates of the college. One was a male with a Latino background and experience in IT education. The other was a woman professional from an Arabic background with extensive recent experience in the law. The first said that, throughout all of his undergraduate and professional background, he had always seen and experienced the benefits of diverse teams. And, he added, those teams were tested and measured by the mettle of their performance and ability to deliver results. He’s seen imbalanced teams -– 80% women and 20% men –- where the leader (a woman) decided the team would be better and more effective when it could benefit from a more balanced combination of skills and perspectives.

The other younger professional described how she was part of a team of 25% women, one of whom was recently promoted to partner. She said her new boss was not limiting anyone’s potential, but rather was giving all of them new and challenging assignments to ensure they developed their own talents.

This is today’s experience: making progress on merit, being measure by performance and results delivered. Today, we are far closer to the goal of an equal playing field that we are to "tgc." Those who fail to recognize that progress are stuck in a era long gone.

It is time that we stopped allowing yesterday’s problems to define how we address the challenges of today. Most certainly, it is time that we dug a very big hole and buried that limiting expression ("tgc") that is as derogatory and limiting as the n* world is to the African American community.

What is the purpose of using that expression as a simplistic knee jerk reaction to any comment or research on the subject of women or other professionals? Does it have any relevance to this 21st century economy or are we simply using it as a token excuse for our own failure? Has the phrase become a lame excuse because "wink wink," we all know that it is futile for women or others because they will only come up against "tgc?"

TGC is gender-profiling at its worst. It is demeaning, insulting, limiting and wrong-headed. It’s time to stop using it in any form.

Tuesday, February 9, 2010

At Least She’s Speaking Up

Elizabeth Warren has written in the Wall Street Journal, February 8, 2010, a challenge to JP Morgan Chase Chairman and CEO Jamie Dimon, among the other denizens of Wall Street:

Wall Street's Race to the Bottom: Jamie Dimon is wrong. We shouldn't expect a crisis 'every five to seven years’.

Ms. Warren is the Leo Gottlieb Professor of Law at Harvard Law School -- where she teaches contract law, bankruptcy, and commercial law. She also is the chair of the TARP Congressional Oversight Panel. In her WSJ commentary, she advocates for the creation of a cleaner consumer financial protection agency than currently exists (actually nothing really exists) among the seven or eight federal departments, commissions, and oversight entities responsible for the financial fiasco.

Basically, Ms. Warren argues that Wall Street has to "earn back" the trust of the American public. The "or else" part of the challenge is that a Consumer Financial Protection Agency will become the big cop on the block to re-establish order in the Wild West that we call the financial community.

As I read the mornings’ headlines, I’m swept up in the media frenzy favoring a children’s obesity task force. Wow and golly gee!

So, it is with great relief that I turn to Ms. Warren’s much more substantive commentary: finally, someone at least has an argument on the subject of these regulatory proposals and the courage to stand up and speak out. Finally, there is someone (and it just happens to be an impressive woman at that) who is willing to address one of the regulatory proposals on the merits.

How many other organizations are there out there giving lip service to consumer protections, to financial controls, to fiscal oversight? My hat’s off to Elizabeth Warren for standing up, speaking up, and keeping the fire burning for some intelligent measures to re-establish the lost credibility that pervades Wall Street.

Sunday, February 7, 2010

Truth and Reconciliation

Nelson Mandela had the idea for a Truth and Reconciliation Commission in an effort to discover and reveal past wrongdoing by government and individuals during South Africa’s apartheid era in the hope of resolving conflict left over from the past. Maybe we need the same thing to understand and accept all the wrong-doings we experienced during the "financial crisis." The blame for the financial failure of the past two years falls on pretty much everyone’s shoulders. Mistakes were made by just about everyone.

John Lanchester’s book, I.O.U: Why Everyone Owes Everyone and No One Can Pay (Simon & Schuster: January 2010) accurately summarizes where the blame can be levied:

1. banks took on excessive risk: Royal Bank of Scotland’s balance sheet exceeded the U.K.’s national income; Iceland’s largest banks took on foreign debt that was 12 times the size of the economy; the SEC’s April 2004 exemption of brokerage units from taking on excessive debt resulted in companies like Bear Stearns leverage ratio (borrowings to assets) rising to 33:1;

2. "financial innovation" allowed loans to be passed on with no individual entity retaining responsibility for the underlying asset’s recovery or repayment; so-called "innovations" included credit default swaps, off-balance-sheet special investment vehicles/special purpose entities, and a complex array of derivatives. According to Prof. Henry Hu, this was a massive "debt-decoupling" where all the risk was dumped onto naive investors, while all the fees were retained by the financial entities;

3. risk assessment was based on mathematical models that were little-understood and which separated investment from true underlying asset valuations;

4. boards of directors and management had little if any comprehension of the underlying models or the risks, therefore provide little oversight or internal controls;

5. mathematical models were based on fundamental flaws of judgment and lacked essential risk-weighing information;

6. models were used to maximize short-term fee-based revenues at financial institutions;

7. business schools and other educational entities took up the glamorous business of teaching financial engineering and model-building without any consideration for the ethical consequences of the downside of their for-fee training;

8. financial institutions and pension, mutual, and private funds participated in "collective wishful thinking," marching in lemming-like lock-step; the clique of social networking favored the followers; skeptics were ignored;

9. the Federal Reserve System failed to respond to indicators that argued for increasing excessively low interest rates for a protracted period of time even in the face of the housing bubble;

10. regulators fell prey to politics: failed to provide oversight, enforcement, or mandate transparency anywhere: accountants/audtors, banks, insurance firms, pension firms, securities firms, appraisal firms, real estate mortgage, sales and brokerage firms, hedge funds; or ratings agencies;

11. credit ratings agencies failed their due diligence mandate and became the pawns of the financial investment sector;

12. economists as well as academicians became enamored of the wizardry of financial engineering and failed their charter of neutral, third party objective analysis;

13. the media propagated paradigms of efficient markets, rational expectations, and a belief in the capitalist system which suckered the investment community into making decisions that exceeded the investors’ financial literacy

14. politicians allowed financial industry lobbyists to write their legislation for them, abdicating ownership and control over the content, and abandoning the financial consumer to the jibberish of the marketplace

15. legislators, advocates, and developers pushed the GSEs (Fannie Mae and Freddie Mac) to levels of subprime lending that exceeded the capacity of the financial community to manage the underlying risk

16. predatory lending was allowed to reach epidemic levels even though a horde of regulatory entities, all responsible for oversight and control (including the FBI), collectively ignored all apparent indicators of out-and-out fraud

17. all sectors of the economy worshiped credit regardless of the capacity of individuals or institutions to manage debt effectively

18. excessive compensation was fueled by short-term, fee-based levies, while average incomes were allowed to stagnate for decades

19. housing construction (AGAIN! How many times have we allowed the construction industry to drive us into economic oblivion?) was allowed to accelerate beyond what could be considered a reasonable level of investment compared to population growth, migration, or incomes

20. the consumer became financially illiterate, not only playing in the financial marketplace beyond logical limits, but in many instances doing so fraudulently on a massive scale.

Given the pervasiveness of these incompetencies, throughout the financial marketplace, we might expect that any proposals made (whether by the financial community, legislators, the regulators, or the high and mighty men and women of the administration) might possibly attempt to link the alleged solutions to the specific problems identified.

Making that linkage a reality should be the first step in addressing some of these problems. Addressing the solutions assumes taking ownership of the problems -- it assumes a little truth before we can reconcile.

Thursday, February 4, 2010

If Women Are Soooo Smart

If women are sooooo smart, then how is it possible for women to be 50% of the workforce -– yet somehow believe we were not party to the financial failures of the past few years? How is it possible to have half the workforce yet also to have zero sisters working the trading desks along with Lehman Brothers?

If mistakes were made, by everyone, how is it feasible that there were no women present at mortgage brokers, lenders, bank mortgage arms, appraisers, or among house-flipping sellers during the recent residential mortgage melt-down? Why do we believe that men alone were on the front lines at ratings agencies, in enforcement offices of the SEC, the CFTC, the OTS, or on staff at Fannie Mae or Freddie Mac? Where were the women at work during the past two years? Were women hiding in the baby-feeding/changing rooms off the cafeteria during all this fraud?

If women represent 44% of graduate business school degree recipients, 49% of the undergrad business degree recipients, and 61% of all masters’ degree recipients, then how did all these smart women also miss every economic warning of impending disaster? Or did they all see it coming and just keep it to themselves?

If women are responsible for 85% of the consumption in this country, didn’t women’s insatiable demand for goods generate an insatiable demand for credit debt and excessive equity borrowing on residential property? Did only men overbuild MacMansions simply to satisfy their home theatre wants and needs – while women somehow remained satisfied with tiny kitchens, unadorned atria, and old Republican cloth coats?

Women own this financial fiasco as equal partners, let’s not kid ourselves. It was a woman who came up with the concept for credit default swaps. Three women enforcement officers at the DC, Boston and NY offices of the SEC “missed” the Madoff scam. Women headed the "feeder funds" at a host of charitable organizations nationwide that fed the Madoff scheme. CALPERS brags that it has one of the most diverse corporate boards in the nation, yet CALPERS fell victim not only to incompetent oversight of fees-for-investment-firms, but CALPERS’ financial performance is a cellar-dweller. So much for the theory of improved financial performance as a function of the increase in shirts per board.

Women own all of the problems, along with our brothers on Wall Street. Women were not innocent babes in the woods. Women need to accept their share of that reality before we can dig our way to a “New Financial Foundation.”

We can no longer assume that women can or should "shop til’ we drop" as the strategy out of this economic quagmire. There is a reason why mall space is being emptied out, why Macy’s future is looking grim. There is an economic rationale behind the collapse of the Soap Opera marketplace and why Oprah is leaving, stage left. The consumer driver of old (She) had to go to work. She now spends 8 hours a day away from the television, magazine, and mall because She has to earn her share of the household income, just like He once had to do it, alone.

The consumer mentality now must be replaced by a savings-and-investment-engine. For women, the challenge is to get out of the over-emphasis on simplistic beauty products defining her life. Clothing will have to serve a purpose, rather than satisfy a whim. Home-make-overs will be driven by energy conservation, sustainability and efficiencies, rather than matching her personal color-scheme. Women will need to drop the hobby-works, table-scaping and scrap-booking and instead substitute real income-generating employment.

There are a dozen viable economic sectors that need to be seeded besides just food, personal beauty services, nail treatment and mindless self-engrossed entertainment. Are women ready to make a contribution to the other half of the modern economy?

Are women ready to earn that last 23 cents on the dollar or will they persist in under-bidding compensation for their services in order to "gain other more meaningful benefits?" Now that companies are downsizing and dropping that company-store called a day care center, will women finally create a viable child-care service sector where women actually pay credible, competitive wages to other individuals to tend their kids all day?

Are women ready to take their own companies into that unchartered territory defined by the "non-traditional industry sector," the over-a-million-dollar-a-year revenue space, employee-based businesses (not volunteers) and competitive employee wage levels? Are women willing to pay all those special fees and costs that have been layered upon business enterprises by "advocates" who favor one issue after another -– fees and costs that are seldom borne by the righteous advocates themselves because they are all non-profit and charitable causes.

Finally, if women are sooooo smart, then will women start to build their women-owned businesses with boards of directors by tapping a diverse pool of talented and competent candidates which include men as well as women with the experience, education, and capacity to create and sustain growth-oriented enterprises?

If we think that 15.2% of the total of 5,500 Fortune 500 board of director seats, occupied by women, is such a small share, then why are we satisfied, first of all, that only 3% of 10 MILLION women-owned businesses earn more than $1 million in revenues a year and, second, that only 13.6% of that tiny share of profitable women-owned firm even HAVE a board of directors?

If we’re so smart, why don’t women start building champion boards and growing our own businesses up to compete in the modern economic marketplace?

Monday, February 1, 2010


There were four women on the stage and in the newspaper’s photograph announcing The Governor of California’s Women’s Conference this past October 27, 2009. All the women were teary-eyed, as probably were the 25,000 women in the audience at the Long Beach Convention Center. Grief, tears, sadness -– oh, the tragedy of A Woman’s Nation.

I attended one of the first Women’s Conferences in Long Beach, probably 20 years ago, when Joan Rivers was the keynote speaker. She also spoke of her tragedies, the suicide of her husband, the financial destruction and the career catastrophes that followed. I remember her describing the days that she could not get out of bed, soaking her sorrows in the contents of Rocky Road ice cream. To hear Joan Rivers speak of these tragedies is both profound and funny, at the same time. The surprise was when she described the moment when she finally told herself, “Enough!” and got up out of bed to become a mother again to her equally-struggling daugher.

"Enough!" is a powerful and inspirational word. It’s been the choice of many women of achievement who realized they had been played the fool, or a victim, or simply too na├»ve.

"Enough!" is the message to oneself to take control back over one’s life and start anew, wherever you find yourself -– even it that be at the very bottom of the self-pity barrel.

In the introduction to The Shriver Report, Maria Shriver quotes her mother Eunice Shriver as sayng, "Don’t let society tame you or contain you. Use adversity to give your life purpose and mission. Turn your adversity into advantage and opportunity."

Eunice Shriver took challenge and turned it into opportunities. Imagine how Eunice Shriver must have felt upon hearing that she had given birth to a mentally disabled child. I don’t know how long it took for Eunice Shriver to stand up and tell herself "Enough!" but when she did so, she ended up creating the Special Olympics -– that most enduring and now internationally recognized forum where challenged populations not only excel, but absolutely defy all historic stereotypes and presumptions of incompetence.

Ted Kennedy was born with a silver spoon in his mouth, yet built a political career devoted to trying to adjust the balance of power and influence to ensure fairness and equality of opportunity for all members of society.

Maria Shriver inherited family wealth and fame, received a worthy education, had a satisfying career in journalism, married a celebrity politician, had healthy children, and most recently wrote a couple of children’s books. Yet, Maria Shriver now issues a report which says that all our laws, all our public policies, and all our social institutions should change to accommodate demanding women.

I certainly can sympathize with Maria Shriver’s continued feelings of the loss of her mother, Eunice Shriver, and her uncle, Ted Kennedy. I would feel comfortable giving her a full year to recover from those huge losses. Perhaps Maria Shriver should not have even undertaken the conference this year, given the magnitude of those losses.
But, as to the merits of the report and the conference, I believe the time has come to say "Enough!" Enough whining about "poor women," "suffering women," or other women who are "waiting for the world to change." Enough already with glamorizing the likes of Rosanne Barr as "the ideal American female image" on television. Enough already with blaming every institution, including the media institution that made Maria such a financial windfall. Enough with women not taking ownership of their own decision-making, such as spending us into the corners with our mad consumer-driven economy, rather than rising to be productive members of society and creating things of value worthy of investment, rather than t-shirts and edible underwear.

Enough with telling us that the more women the merrier, the more women the more profitable, the more women the more perfect a world we would have. Enough with women not taking full responsibility and accountability for their share of the problems with kids becoming obese, with kids watching television for 32 hours a week, for kids failing in school, for teachers (a vast majority of whom are women) failing to advance their skills and competencies to keep us competitive with the global economy, for health care workers (a majority of whom are women) who are failing to deal with our contemporary health, health-finance, and health-technology challenges, and for our real estate brokers (another area of concentration of women) who are failing to deal with homebuyers fairly and equitably.

We own these problems along with that amorphous entity all women consider at fault: Society! Culture!

Enough with women who believe so righteously in not-for-profit entities, but fail to acknowledge the reality that they are avoiding paying taxes, real wages and benefits, pensions, and using the uncompensated labor of volunteers to advance a private, personal agenda.

Enough is enough. It’s time to listen to Eunice and "turn adversity into advantage and opportunity." Let’s stop whining about it all and start doing it.