The Debt Ceiling and the US Economy

Not a small topic for a short blog entry. For weeks the headlines have been all about the US hitting their debt ceiling and the possibility of a default on government debt. Now it seems like we have a 'deal' that will stop that from happening, a deal that likely no one really understands let alone buys in to. That said, thank goodness there is one. One could only imagine what the consequences of a default might have been, but it might well be the case that we begin to live them out due to lack of faith that the government of this great country of ours may be ever able to stop us from drowning in debt. Monika Mitchell of Good Business International gives a great overview of this crisis which you can access by clicking here.

Many have been asking my opinion about the economy, the equity markets, the bond market and more, so here it is in brief. I would continue to hold cash, gold, fundamentally strong global equities, commodities broadly speaking over the long run, and not much else right now. Further it is likely that the US dollar will continue on it's long term descent, so beware that if all you own are dollar denominated assets your purchasing power will be eroded away.

Why concern on US equities? I believe the fundamentals remain very poor. Yes corporate earnings and balance sheets are strong but because of cost cutting primarily, which is largely done. Without a robust domestic consumer how much hope can their be? Further the economic numbers have been horrible - employment, GDP, and more. I am particularly worried about the financials given that spreads (difference in yield between government bonds and corporate/mortgage/high yield debt ) in general are narrow, issuance is down, and the poor real estate market will work it's way in to write-offs.

US bonds. Rates are so low, artificially low due to the huge treasury buying program which cannot go on forever. You are simply not getting paid enough to go long duration. For more on this read the latest commentary by bond manager/guru Bill Gross of PIMCO.

Gold - protection against a depreciating dollar, financial insecurity, and the declining faith in the US dollar as the currency of choice. For so much more on gold check out this website - JSmineset.

Sorry wish I could be more positive on both the economic and market outlook but I really see little good news out there. Bottom line we have spent beyond on our means for some time now, at multiple levels, and sooner or later you have to pay the price.

I am officially taking a blogging vacation so wishing you all a fabulous August.

New Study Shows Working Mothers Do No Harm to Their Young Children

A new "long-term study by University College London suggests young girls fare better if their mothers go out to work." (link to article and study) I wish that wasn't the headline. I wish that we were past needing or wanting studies and headlines like this that pit working mothers against stay at home ones. Reality is though we still live in a world were women who work, whether by pure economic need or other reasons, are too often made to feel or just feel, that their children will suffer because of it.

We also still live in a country that does not do enough to support working parents. "The ideal scenario for children of both sexes was for both parents to live at home and for both to be working, a finding that will encourage policymakers' moves to help families stay together, if not critics of the rising numbers of working mothers." This should have been the headline for the research. Policies and practices like maternity leave, pay-equity, paid sick leave, compassionate leave are not women's issues, they are family issues and need increasingly to be framed as such for the health of our children, our communities and our nation.

To learn more about the issues please check out the Institute for Women's Policy Research.

The Bumbling of the Sexes in the Modern Workplace

My latest article, "The Bumbling of the Sexes in the Modern Workplace" was just published on Women Advisors Forum, a new online community of women investment professionals. It offers a fresh take on 'bad behavior' in the workplace. The kind of behavior I wrote about does not make headlines but may be one of many reasons why women are still far from achieving greater success in critical mass in the workplace.

Say NO to All Male Corporate Boards! - HUFFPO

It was an honor to co-write this oped with Joe Keefe, CEO of PAX World Funds. There is so much discussion about the lack of women on corporate boards, and here is something YOU can do to take action. Vote your proxy! PAX is leading the way in this effort and also writing letters to CEOs with all male boards putting forth the evidence that more diverse boards lead to better decision making. Thank you Joe I will hope others will follow - institutional investors, investment advisors and individuals!!

For more information on PAX Click here.

Women and Wall Street - We Need them!

Did you know the number of women working on Wall Street has decreased dramatically? An article back in September in the Wall Street Journal stated that "in the past 10 years, 141,000 women, or 2.6% of female workers in finance left the industry.The ranks of men grew by 389,000 in that period, or 9.6%." New research released this past week says that "less than 5% of the most senior executives at investment banks are women." This is a serious issue that we need to care more about. Let me tell you why.

There is a large amount of research, summarized well by Nicholas Kristof in this article , and in this research report by the National Council For Research on Women, that having women present in critical mass in leadership and decision making positions could lead to better outcomes.

We just went through a massive financial crisis, one characterized by excessive risk taking and greed, led my men, and now we have even more of the same in decision making positions. Please someone show me the list ( and it should be long ) of senior people who lost there jobs over this? Please someone give me examples of firms that said you know we messed up, we want to be better next time, and we are going to shake up our leadership teams, think out of the box, add talented, diverse people because hey, we don't want this to happen again. Now the numbers show not only is this not true, but we are moving even more in the direction of homogeneity.

Every time I write something like this I get a whole bunch of nasty responses saying I am out to lunch, that women are as greedy as men, that women should not be favored, blah blah blah.... I say PROVE IT. Find an example of a women leading organizations or systems where the outcome was the loss of trillions of dollars, hundreds of thousands of jobs..... Or perhaps this is easier, show me the EVIDENCE that rooms and buildings full of white, American, upper-class men have done such a good job creating a somewhat just, equitable, well functioning financial system. When is it time to take a leap of faith, embrace the research, and enact the solutions so that diversity on Wall Street might finally be achieved? I am not talking about a women take-over, I am talking about a goal of critical mass, 30% women on the board and in senior leadership roles. The goal is greater balance. Our current system is out of balance!!!

If you have any doubt that our financial system is run my white guys, watch the Academy Award Winning film "The Inside Job." Read any one of the now hundreds of books telling the tales of the crisis and get a highlighter out when they mention a woman.

The real question is how do we get there. That I need to tackle in another post but read the NCRW report!!!! As a co-writer and funder of this research it tells you how. It is a road-map for how to increase diversity in the financial services sector.

These numbers are shocking, disturbing and everyone who ones a stock, a bond, a house or gives a hoot about our collective economic future needs to care.

Resources

This article was just written today by Amy Siskind of the Daily Beast on the same topic. ( click here to read it)

"Ranks of Women on Wall Street Thin" by Kyle Stock

"Revealed: scale of gender bias in investment banking" by Elena Moya and Shanny Basar

Link to research mentioned

"Where are the Women on Wall Street?" The Female Factor - NYT

"Terminated: Why the Women of Wall Street are Disappearing" - Anita Raghaven FORBES

Museum of American Finance - History of Women on Wall Street

Fannie and Freddie - the story continues

I am sure at least a few of my regular readers might be wondering WHY I have not yet done a posting about the report just out on the future of Fannie Mae and Freddie Mac. ( and the mortgage market ) The reason is that I knew my dear friend Bethany McClean, author of THE BOOK on the subject called "All the Devils are Here " would most certainly be called upon for comment. She was, and her brilliant response appears on SLATE .com ( click here) A number of options were presented and none of them are too practical. The combined entities who dominate the multi-trillion dollar market have so far cost the taxpayers $130 billion dollars. Two monsters were created and we will continue to leave with their remains for some time.

I have done numerous posts on these two entities and if you would like to read any of them please go to my web-site and search Fannie.

Women's Funding Network Conference 2011 - Investing with a Gender Lens

I serve as the Vice-Chair of The Women's Funding Network a network of over 160 women's organizations around the world. They are hosting their annual conference this year April 7-9, 2011 in Brooklyn, New York. This global conference is called The Power of Global Networks and its purpose is to bring together women's fund leaders, donors, experts and activists from around the world. The conference will focus on how women's funds turn the conventional model of philanthropy upside down, radically changing the way individuals, corporations, foundations and government invest in women and girls. It will also focus on how women's funds, and the network at large, is an effective vehicle, for shared leadership and collective action, allowing us to authentically and effectively extend our reach, increase our impact and build a movement for social change. Please join us! The conference is open to everyone.

We have a fantastic line-up of panelist and speakers including Ms. Michelle Bachelet. She is the first Under-Secretary-General and Executive Director of UN Women which was established on July 2, 2010 but the United Nations General Assembly. Under Ms. Bachelet's leadership, UN Women will lead, support and coordinate the work on gender equality and the empowerment of women at global, regional and country level.

I will be moderating a panel on Friday, April 8. We are asking the question - How do we use our investment dollars to drive the economic and social empowerment of women and girls? This session will explore how investors, individual and institutional, can invest for profit with the same set of values they apply to their philanthropy and grant making. We ask if viable financial products exist that incorporate a gender lens? What are the current barriers and opportunities? How can the movement to invest in the potential of women and girls make all levels of money matter to make a big impact?

Again. Join us.

Also note that I have added an 'upcoming events' tab above which lists many upcoming gatherings in the women's space. Hope it is helpful.

"Women at the Top" more on the DB comment...

I have to say I love it when I write a blog entry on something (yesterday) and the next day it appears in one of my favorite papers as an OPED. Love it. Today in the Financial Times the editors wrote a piece called "Women at the Top: Make Boards More Diverve and Stop the Patronizing." The article makes the same basic points I did taking to task Josef Ackerman, chief Executive of Deutsche Bank. I love this quote...
"Diversity is not a feminist issue.....Failing to recruit from the widest possible talent pool is bad for a company, it's investors and society at large." I love how it ends as well saying that perhaps DB should think about replacing him when his term is up.GO FT!!!!

Women on Boards - The Dumb Comments Continue

The issue of women on boards continues to make headlines. Many countries are wrestling with the idea of quotas and others have already implemented it. Josef Ackermann, chief executive of Deutsche Bank Germany, recently made a remark about this issue which got him in a lot of hot water. Responding to a question at last weeks annual results conference he stated "I hope it will be prettier and more colorful one day". Mr. Ackermann's comments were attacked by many prominent women in German business, including Ilse Aigner, minister for consumer affairs, saying: "Whoever wants things more colorful and beautiful should go to a flower meadow or museum".

Mr. Ackerman here are a few words of wisdom for what to say next time. "We are well versed in the incredible amount of evidence that greater board diversity leads to better decision making and are trying to get over this white male bias that clearly is reflected in our current lack of diversity. We say we cannot find talented women to fill these board seats but really, we are not trying very hard and this will change. We recognize that women are half the population, are clearly as smart and capable as men, and although there are fewer women with CEO experience that is often a prerequisite for board placement, we will find the talent BECAUSE we know that greater board diversity will lead to better outcomes. We did not do well in the financial crisis as you know, and our hope is that a more robust board going forward will help us weather the next storm more soundly."

Some facts

"Deutsche Bank has no female executive board members and last year only 2.2% of executive board members at the 30 companies in Germany's blue-chip DAX index were women. Germany also came last in ranking if women's representation on executive boards."

- 14.8% of Fortune 500 board seats were filled by women (2009)

-15.4% of Fortune 500 corporative officers were women (2009)

-During the four-year span of their study, Fortune 500 companies with the highest percentage of women on their boards, and greater numbers of women in the clout titles, saw 53% higher returns on equity than those companies with the fewest number of women on their boards.

-Return equity for companies with at least three women on their boards was 16.7%, compared with 11.5% for the average company.

To read more about the article visit Financial Times, Wall Street Journal, or The Telegraph.

Our foundation has created a "Why Diversity on Corporate Boards Matters" Brief - if you would like it please email me at pursepundit@gmail.com .

More Women on Boards

Happy Sunday! I have so much to write about TED, so much. But for now a quick hit on an important topic, getting more women on corporate boards. Read this in the New York Times from yesterday. Within a few weeks I hope to have a dedicated section on my web-site ( jackizehner.com ) that will feature a brief about why the time is now to move for the "Critical Mass Principle" - a voluntary goal for public companies to have a minimum of 30% women on their boards. That brief will feature the many research reports and arguements for why greater diversity on their boards is good business!

Financial Times - Women At The Top

The FT published a list of their top 50 women in world business. It is a fascinating list. Many of the obvious Fortune 500 Women CEOS were of course there, but this list is a global one, and it included many women I have never heard of. Of particular note were a number of young women business owners from China who founded billion dollar companies. Wow.

Sylvia Ann Hewlett and The Center for Work Life Policy

I adore Sylvia and had the honor of serving on the board of The Center For Work Life Policy, an organization she started, for many years. ( click here from FB) The center does cutting edge research on human capital management issues and the Hidden Brain Drain Task-Force turns this research in to action. For a list of their research click here.

Thursday Sylvia had an OPED published in the Financial Times called "A Final Push Can Break the Glass Ceiling" on their newest Sponsor Effect research. It is an extremely well written piece and a timely one given the prior days announcement of a new round of GS partners.

Here is my summary of her article:

- Yes progress but women still hold only 15% of corporate board seats, make up less then 5% of top earners and 3% of Fortune 500 CEOS. Numbers are worse in the UK.

-Why? Talk of discrimination,work/family trade-offs, lack of the 'vision thing', nor ambitious enough. She says.. much more to it.

-Her new research - "women who are qualified to lead stall not for lack of drive, but for lack of push." It is about sponsorship.

-Why the difficulties in getting sponsors? Reluctance to give women feedback, fear of mentor ship either being perceived as or leading to more (the sex thing), and more.

- UK is pushing forward with a 'plan to take female representation on corporate boards to 50%."

- This week on Tuesday "a group of major companies launched a new "30% club" aiming to increase female board representation to 30% by 2015."

Personally I was blessed to have some amazing sponsors at GS, including a man named Mike Mortara who was my immediate boss and later the head of fixed income. There is no doubt that I would not have made partner without his intentional support and mentor ship. There were others as well and I could not agree more with Sylvia's findings and the importance of these strong relationships. Later when I worked on the partner selection process it was so clear that without a senior person pushing for the candidate, they were less likely to make it through. When push came to shove and it was one candidate versus another, the power and voice of who was in the room pushing for them made all the difference. It was also my experience that it was more likely that a woman did not have that voice in the room, and their road to partnership became much longer.

Thank you Sylvia for the work you do. It is truly an honor to be in your circle and connected to the work of the Center. If you have not already read it, I would highly recommend Syliva's book "Creating a Life: What Every Women Needs to Know about Having A Child and a Career," as well as her latest, "On Ramps and Off Ramps: Keeping Talented Women on the Road to Success." ( click here for Amazon)

Goldman Announces a New Partner Class

It is a big day for over 100 people who were named the new Goldman Partners. I remember getting the phone call in 1996 from Jon Corzine, as did my husband Greg, and it was special indeed. At the ripe old age of 32 I was invited to be part of a club, perhaps the club, and one of only a handful of women to be so named. Two years ago I wrote an oped about it, and in the words of Forest Gump - "That's all I have to say about it." Well.. maybe not all, but that is all I have to say for now.

Congratulations to all the new partners, and in particular the women partners. Use your position wisely and for the benefit of the women to follow. Though I cannot tell how many of the new partners are women one web-site said it was 10%, which if true, is disappointing. For a leader in corporate diversity my fingers are crossed that the numbers are much, much higher.

ps - I hope you all are still having that brunch.

Fannie and Freddie and $259 billion

On February 25th, 2008 I wrote my first OPED about Fannie Mae and Freddie Mac. (click here from FB)The piece was called Quickfixonomics, and appeared on the Huffington Post. At that time I criticized the government for increasing their loan limits as their balance sheets were already a complete mess. I cannot imagine how much THAT MOVE contributed to the $259 BILLION in total expected losses that were reported yesterday. $259 BILLION. Can you all please think about that number. This is not TARP, this is not WALL STREET, these losses are the result of government creating agencies to make homes more affordable for Americans. I have written dozens of blog entries about these two and it is truly just heartbreaking. Now what? is really the question. The truly sad thing is these losses will likely continue and go higher. They have no way to hedge their portfolio that I can think of against decreasing home prices and defaults. Given they own and guarantee trillions of mortgages, and home prices have decreased on average around 30%, it likely means this number is going to be much, much higher.

Now I really hate playing the blame game but this makes be angry. Years and years ago when Fannie and Freddie were printing money for their shareholders and bringing down mortgage rates it was all good, and so they kept expanding their portfolios because as a publicly traded company, that was what they were suppose to do. By buying trillions of mortgages they 'crowded out' other natural purchasers of bonds, perhaps forcing them in to investment strategies and products that were not optimal. ( think Alt A, subprime mortgages, and the like) I have done this rant before in one of my other dozens of entries on these mortgage giants but every time I see another headline about how much money they have lost I lose it. $259 billion. THIS WAS AVOIDABLE. The responsibility for oversight of these organizations was by people that are still in power today, like Barney Frank. I would argue that if Fannie and Freddie did not exist in the form they did, we would not have had this financial crisis. Were they the only players? No of course not. But go down the path of imagining the financial world, and especially the securitized world, without the likes of them, and I don't think you would end up where we are. Note that no other country has the likes of Fannie and Freddie, and they did not experience a financial crisis like the US did.

$259 billion and rising. It is all just so sad. Regarding this foreclosure mess. My gosh.. I don't even know where to start. I am really worried this will all lead to the next inning of financial market chaos.

For all the blogs I have written on Fannie and Freddie go to my web-site and search Fannie.

www.jackizehner.com

Closing the Gender Gap: The Business Case for Organizations, Politics and Society

Last week I had the honor of attending a conference (click here from FB) at the Harvard Kennedy School of Government which brought together over 100 though leaders to discuss the research that supports the positive economic value of gender diversity. It truly was a ‘who’s who’ of researchers in the field, including many of the people we quoted in out “Women in Fund Management” Study. A partial list includes:

Barbara Annis – Author, Leadership and the Sexes

Hannah Riley Bowles – Associate Professor Harvard Kennedy School, extensive research on gender in negotiations and the attainment of leadership positions.

Iris Bohnet – Professor of Public Policy at the Harvard Kennedy School, extensive research on the role of gender in decision making.

Robin Ely – Professor at Harvard Business School, research on race and gender relations in organizations.

Morten Huse – Professor of Organization and Management of BI Norwegian School of Management, published widely on the topic of women and diversity on boards of directors.

Herminia Ibarra – Faculty of INCEAD, and expert on professional careers and leadership development.

Rosabeth Moss Kanter – Professor at Harvard Business School and listed as “one of the most powerful women in the world.” ( pictured left)

Mona Lena Krook – Assistant Professor of Political Science, Women, Gender and Sexuality Studies at Washington University in St. Louis. An expert in Quotas for women in politics.

Terrance Odean – Hass School of Business and an expert in behavioral economics.

Scott Page – University of Michigan, Professor of Complex Systems, Political Science and Economics.

My takeaways in brief:

- The evidence for investing in women and girls in the developing world is conclusive and compelling. Create and fund programs that provide for economic their opportunity and security.

- Quotas Quotas Quotas. I am absolutely in favor of quotas for boards of directors of publically traded companies. Representatives were at the conference from Norway sharing how almost no one wanted it, but they did it, and it is having very positive impact. ( they have a 40% law) So many other countries are doing it and it is THE THING we can do to create huge positive change.

- The benefit of gender diversity in groups is nuanced. It is not just add women and better outcomes; it is about creating an inclusive environment which leads to better outcomes. This is the main reason why diversity programs have failed to deliver. We are adding women without changing the culture. PS – an inclusive culture is better for men too!

- Change has and always will be about power. Women have so much more then we are using. We continue to be asking permission when we should be demanding change. The research supports that change is good business.

- Overall there is just a huge and significant amount of research that makes the business case for women. I knew that, but this gathering solidified it for me. Even where there was not absolutely conclusive research of a diversity bump, it does not matter. Show me the other research that says conclusively that excluding women or keeping them a minority leads to better outcomes. The fact that in 2010 we still have to PROVE that we deserve a seat of the table is crazy. I mean really?!? Really?

It was a joy to meet the researchers that do the work that fuel my arguments and my passion. Hopefully soon I will have an updated research list of all their work but for now many of their studies are listed or quoted in the resource section of my website.

The Lack of Women in Finance - A RANT!!!!!!

Women in Finance is a hot topic these days. (click here from FB) I can barely keep up with the articles talking about the lack of women on the street, pay disparities, lawsuits and more. Here is the most recent from BLOOMBERG filled with great stats:

- Women in Finance earn 63.9 cents for every dollar men made in 2000.
- Same stat for 2001 - 58.8 cents

- Biggest gap in any of the 13 industries surveyed by the Government Accountability Office

- Number of women in finance, banking and insurance in the US fell by 537,000 between the second quarter of 2007 and the second quarter this year

- Citigroup does not have any women on their executive committee - 19 men

The reasons as to " why so few" are many and the research paper "Women in Fund Management: A Roadmap to Critical Mass and Why it Matters" addresses this in detail ( click here ), but her is more of my personal take:

- Pipeline issues - Fewer women then in math, science and business programs. Fewer women choose to enter the field out of undergrad or graduate school. That said, when the environment is perceived as not "women-friendly", no wonder.

- Gender Discrimination and Bias - Wall Street and finance in general is still very much a 'boys club.' Some firms are better then others, but all the major institutions are governed by men and many of them bring their personal biases to work place and for some, bad behavior. When I began on Wall Street strippers still made visits to the trading floor in celebration of someone's birthday, and thank heaven those days are behind us. That said, it is naive to think that men who think that it is fine to stuff hundred dollar bills in g-strings of naked women at night, don't bring some of that to the workplace with them in terms of how they manage, mentor, co-exist with women in the work place. On the other hand I think some women bring too much of their sexuality in to the workplace and I have seen them use it as a tool to get ahead. It is a delicate balance and one that women, more then men, will have to manage. More relevant is the reality that we are more comfortable with, and confident with people that look and act like ourselves. If you are a man, that means men. In a male dominated work place it takes a huge effort to move away from that tendency and needs to be driven by a deep belief that talent comes in both genders, and all colors. Great new book on this - Laura Liswood "The Loudest Duck: Moving Beyond Diversity While Embracing Differences to Achieve Success in the Workplace."

- Problems with Diversity Initiatives and Programs - Despite a lot of good intentions and good programs, too many managers remain ill-equipped to manage a diverse population. Many firms have pages of programs, but the numbers are not changing and it is time to ask why. Too many firms are just checking the box with programs rather than creating accountability for their outcomes. Evaluate. Measure. Rewards positive outcomes.

- Fear of law-suits and the challenge in firing poor performers that are women and minorities. This is a big issue that is not being talked about. It is a chicken and the egg thing. Because there are so few women and minorites, if they end up not being good at their job ( and that may be because of bad management) it is hard to fire them. The are 'saved' as one manager said to me and this creates huge resentment by the manager and the team. The effect might well be that managers who have experienced this become reluctant to hire women and minorities unless they feel they are a "sure thing." It is just easier to fire men if they are not good, so why not hire just them to begin with? Think about this scenerio. You are a guy with good intentions who tries to hire the best talent for his team. Most of the hires are MBASs with no real experience and thus it is all about perceived potential. You have men and women candidates. They look the same. You had the experience with a prior hire, a woman, who proved not to be cut out for the job but despite your efforts to train her and HR would not allow you to fire her. You were told to pour more and more energy in to her success and it just was not working. Sure if she is great you get pats on the back and you have a great team member, but the downside is there. If you just hired the guy and he was great, great! If he did not work out, bye bye. It is at this level that we must think about as it is at the heart of WHY so few women I believe. We have to think hard about the personal and organizational incentives and disincentives around creating a more diverse workforce.

-Maternity Leave - Let's be real. This is a big issue. If you have a desk full of 20-30 year old women, they are going to have babies. As a manager if your employee is out on maternity leave, it means more work for the rest of team, likely without additional compensation. In an industry where all employees are worked to the bone, this is an issue. Again it is about incentives. Firms need to take a big look at this issue.

- Work-life Balance. This will always be more of an issue for women then men. Women have the kids and the pressures to be a 'good mom' are big. This may be the ultimate reason why we don't get to 50/50. That said, I have met PLENTY of women who choose not to have kids, have husbands with more flexibility and so on. This challenge can be addressed institutionally with more flexibility in roles, but the cultural issues remain. Men in finance have to want to be more then the funders of their families for things to really change. They have to want to be great dads in the same way that I think most women want to be great moms. It means being there for more then weekends and family vacations. I KNOW there are some amazing dads out there who are also senior organizational leaders, so this is a generalization. There is a win/win here for all if corporate America cared more about supporting families.

- CULTURE CULTURE CULTURE - First institutionally. I worked at Goldman Sachs for 14 years. Their culture prides itself on being a meritocracy. That belief is core to their being. I had this experience years ago at a management committee/partnerhship committee offsite on diversity. We were in a small group discussion about why so few women and minorities at the firm. At my table were 9 men and myself. I asked them "look around this room filled with our most senior leaders. Do you think this room is 90% white men because they are the best, the brightest, the hardest working?" They answered YES. They truly believed it. It was not long after that I left the firm. These are not bad people, in fact most of them are GREAT people. They do not know what they do not know and most of them walk around in the world as privileged, powerful, white men. ( I walk around as a privileged white woman)Most of them do not experience exclusion or discrimination and because of it they have no frame of reference for it. They are immune. They do not personally experience discrimination so it is easy for them to assume it does not exist. That classic well it did not happen to ME so I guess it does not happen at all. Catalyst did a GREAT report about getting men engaged in diversity initiatives and they said that the men most likely to be diversity champions have experienced BIAS PERSONALLY!!!

Our broader CULTURE. We still live in a world that values men and boys more then women and girls. This is the issue I will work on for the rest of my life. This manifests itself in a million different ways in our homes, in the media, in the workplace and in the world in general. We have focused a lot of energy towards building up girls self-esteem which is awesome. Increasingly the world recognizes the need to get financial resources in the hands of women, especially in the developed world. Again awesome. But.. we have a long way to go. We are talking about power and control and changing the status quo so it will be hard.

Bottom line is this. We all have to care about creating a workplace, a world, where access and opportunity is available for all. We have to digest that the world is not fair, and if we made it to a place of privilege we OWE it to others that they have their shot too. We have to recognize that gender discrimination is everywhere and we have to look for it so we can eliminate it. I believe with all my heart that a more gender balanced world is in the best interest of all. In that world there will be more women leading institutions and more men free to be in the home being amazing husbands and fathers. Men and women are suppose to be in it together.

"Goldman Bias Suit Offers Wall Street an Opening" - Jacki Zehner

I have much to say on this topic. So much. Bloomberg asked me to write something for them and here it is. I have received many incredible emails in response to it, from men in particular. Many men have shared with me their frustrations in trying to hire, retain and promote women. Further they point to the institutional challenges that exist and must be addressed if we are to move forward. I have written many times in this space how I think diversity efforts have largely failed, and I will write more on that topic.

Thanks to Bloomberg for inviting me to write this piece and to my very special, personal editor who challenged me to think about my intent in writing it.

Goldman Bias Suit Offers Wall Street an Opening.

Class Action Launched Against GS

A class action law suit was filed today against Goldman Sachs. The entire suit can be found on this link. ( click here ) The details are below.

National Class Action Lawsuit in Federal Court Charges Violations of Federal and Local Civil Rights Laws
Business Wire
NEW YORK -- September 15, 2010
Goldman Sachs has engaged in systemic and pervasive discrimination against its female professional employees, a lawsuit filed today in federal court in New York alleges.
The lawsuit, Chen-Oster v. Goldman Sachs, Inc., Case No. 10-6950 (S.D.N.Y.), filed by three highly-credentialed women represented by Outten & Golden LLP and Lieff, Cabraser, Heimann & Bernstein, LLP, accuses Goldman Sachs, a leading global investment banking, securities and investment management firm, of engaging in a pattern and practice of gender discrimination against its female Associates, Vice Presidents, and Managing Directors. The women allege violations of federal and city laws, including Title VII of the Civil Rights Act of 1964 and the New York City Human Rights Law.
The case is pending before United States District Court Judge Leonard Sand.

According to the complaint, the ``violations of [Goldman Sachs'] female employees' rights are systemic, are based upon company-wide policies and practices, and are the result of unchecked gender bias that pervades Goldman Sachs' corporate culture. They have not been isolated or exceptional incidents, but rather the regular and predictable result of Goldman Sachs' company-wide policies and practices.''

``The gender-equality issues raised by this lawsuit are all too familiar – Goldman Sachs systematically undervalues the efforts and achievements of its female employees. This is an important step in our efforts to eradicate discrimination within the financial-services industry,'' said plaintiffs' attorney Adam T. Klein of Outten & Golden LLP of New York, New York.
``This case challenges Goldman Sachs' practice of treating its talented female professionals like disposable, second class citizens,'' said plaintiffs' attorney Kelly M. Dermody of Lieff, Cabraser, Heimann & Bernstein, LLP of San Francisco, California. “By coming forward, the plaintiffs are working to ensure a level playing field across Wall Street.”
The complaint charges that, among other things, Goldman Sachs compensates its female professionals less than similar male professionals, disproportionately promotes men over equally or more qualified women, and offers better business opportunities and professional support to its male professionals.
Attorneys Adam T. Klein, Cara E. Greene, and Jennifer Liu of
Outten & Golden LLP and Kelly M. Dermody, Anne Shaver, and Heather Wong of Lieff Cabraser Heimann and Bernstein LLP represent the plaintiffs.
The case is Chen-Oster v. Goldman Sachs, Inc., Case No. 10-6950 (S.D.N.Y.).

So where do I stand on this as a former GS partner ( trader ), an executive who worked in human capital management for two years with a focus on diversity, compensation, lateral hiring, succession planning, performance measurement and more? I am working on that entry................. more soon.

Goldman Sachs, FCIC Inquiry, What Caused the Crisis and more...

Goldman Sachs is in the news, again, well always, this time it is with respect to an FCIC inquiry for more information regarding the valuation and pricing of assets and liabilities related to transactions with AIG. Their detailed response provides an interesting overview of the mortgage meltdown and Goldman's participation in the CDO and other related markets. Did GS act appropriately? I am not aware of enough facts to comment, but the level of detail GS is able to provide seems to indicate to me that they were very careful about what they were doing and in line with industry business practices.

As a former trader of mortgage-backed securities, married to another former one (now ordained pastor), we have had many discussions about not just good, but ethical business practices in sales and trading. I do believe their is a strong distinction between retail ( you and me ) and institutional ( hedge funds, pension funds...) clients with respect assumed levels of understanding of product offerings. Honesty, appropriateness, and full transparency should always be governing principals for both. That said people will have differing opinions about whether a security is cheap or rich, and that is what makes markets. Valuation of securities, bonds, stocks or CDOs is ALWAYS based on assumptions regarding underlying cash flows, and people have different assumptions. So does all this mean that "SCF 8A A1NV an early 2006 vintage mezzanine super senior CDO" ( from GS press release) should have ever been created? Debatable. Arguably market forces should dictate what is created (with disclosure rules) and where there is demand, supply will follow.

The deeper question is what forces created the demand for toxic waste securities? I have a yet to be written essay on that topic but I believe the main, but not only reason, was the thirst for incremental yield. With interest rates so low for so long, and with Fannie and Freddie needing to grow earnings through expanding their investment portfolios and business lines, thereby collapsing spreads and yields, both the FED and these agencies played a major role in crowding out other investors and forcing them in to look for yield in all the wrong places. I am sure there are whole BOOKS dedicated to this topic that I wrote just three sentences on, but that is my premise.

As for Goldman they have done a heck of a lot in response to the crisis, as they should. They recently set up a committee to review their business practices, which will be made public and perhaps set a new industry standard. They have not been against financial reform, and in fact they outlined their recommendations here. Bottom line, I do not believe GS was doing anything most other firms were not doing, but that does not make it all ok. There was a massive train wreck and they played a role, as did so many others, and have to accept the consequences. Hopefully the outcome will be healthier and more sustainable financial markets. Time will tell.

A Global Standard for Gender Equality

Greetings from Kelowna BC, Canada!

Should there be a global corporate standard for gender equality? Nicole Schwab thinks so, and I agree with her! In this recent article on the Huffington Post Nicole explains how she plans on creating this measurement tool and why she thinks it could have incredible impact.

"...We set out to develop an assessment methodology that would enable companies to gain a comprehensive understanding of where they stand in terms of gender equality. This methodology can serve as a management tool and at the same time form the basis for setting a global standard in gender equality, and benchmarking companies against it. Companies that meet the standard will be recognized through a global label in gender equality, to be launched in January 2011 by our foundation, The Gender Equality Project."

Nicole was in New York yesterday and I joined by conference call for a meeting with the National Council for Research on Women, where I continue to serve as Board Member

Emeriti. I had the pleasure of meeting Nicole briefly last year in Deauville France for the Women's Forum for the Economy and Society where Linda Basch ( NCRW President) and I presented our Women in Fund Management paper. The purpose of the meeting was to gain a greater understanding of each others work in this area and where possible, to collaborate for greater impact. Momentum is certainly building for greater accountability on the part of large corporations for equitably gender practises and I thank Nicole for her incredible work.