Macho culture blamed for financial failure

MACHO culture, which saw executives being encouraged to take excessive risks, is at the heart of the UK financial crisis, claims a new report.

A study by The Aziz Corporation found that 89 per cent of executives agreed that a culture which ‘rewarded the taking of excessive risk’ contributed to the current financial crisis, while 83 per cent believe that the failure to understand the risk that many financial institutions were running was fuelled by the “macho” culture of many City firms.

Around 74 per cent 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. The survey found 77 per cent argue that the gender balance affects the culture in any working environment, and 93 per cent that the management of major financial services firms is dominated by men.

Professor Khalid Aziz, chairman of the Aziz Corporation, says: “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.

“Many commentators have focused on the need for greater regulation of the City, and for improved systems to control risk. Of equal importance is the culture within those firms.  A culture which encourages the taking of risks which are often without limit and poorly understood has its own downfall built into it.”