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Thomas Cooley

Thomas F. Cooley is the Richard R. West Dean and the Paganelli-Bull Professor of Economics at New York University Stern School of Business, as well as a Professor of Economics[…]

Men need to adapt to the needs of women in the workplace.

Question: Why are women underrepresented in hedge funds and private equity?

Thomas Cooley:  You're absolutely right.  I mean, if you look at-- just to give you a few markers.  If you look at the number of women on boards of directors of the Fortune 500 companies, I think it's like 14 percent, something like that.  If you look at the number of Fortune 500 companies that have more than three women on the executive committee, it's, I think it's 100 companies have more than three women.  And so, in general, if you look at businesses like investment banking or finance, women are very much underrepresented there.  And if you look across most business schools, in, I think that average across all business schools is under 30 percent women.  Our school happens to be unusual in that we have, and have for a long time, the largest percentage of women in our MBA programs, over 40 percent.  And, but it's certainly true that in business as a whole, women are underrepresented, whereas in medicine and law and other professions, they're increasingly evident.  And if you look at women's success in school, at every level of education, the average performance of women is better than the average performance of men.  But what's also true is that the variability of men's performance is greater.  So I think of that as the, you know, more genius nerds and frat boys as opposed to steady performers phenomena.  But what that means is that by the time you get to graduation, it's close to 60 percent women who are graduating from colleges and universities.  So women are dominant there, but not in the world of business.  So there's the big puzzle. 

Question: Why the drop?

Thomas Cooley:  I believe that some of it is biology, that women take time out to bear children and that that interferes with the career track.  I also believe that some of it represents unexploited opportunity for the world of business.  We have these incredibly talented, well-educated part of our population who are going into other professions, but not into business.  There's something wrong.  It seems to me that there's money being left on the table.  And it may be being left there because we don't find the right ways to assimilate women.  But I'm also a big believer that, you know, there are lots of books written about how women need to change to be able to compete in the world of men.  And I actually think that that's kind of backwards, that really, men need to change and the world of business needs to change to be more accommodating to women.  I think it's probably true that a lot of businesses don't, are not well adapted to the particular needs of women.  But I also think it's true that a lot of men don't understand how to-- they don't understand women in the workplace and what their needs and, just what their different social characteristics are.  So rather than needing women who behave more like men, I think we need men who understand that women don't behave the same as men, necessarily, in the work place.

Question: What short-term measures can lure women into business?

Thomas Cooley:  One of the things that it turns out is, a lot of women who take time out of the workforce to bear children and possibly to raise them for a while don't necessarily don't want to go back into that world.  They want to go back into a world where they have more independence and control.  So, you know, a successful woman who's had a career on Wall Street, been on the trading desk, been successful by all the norms that Wall Street applies, takes time out and then realizes, you know, maybe there's more to life than just this.  So that's part of the issue.  I mean, are there things that we can do?  I don't exactly know.  But I think that finding pathways, finding ways for women to transition back into the workforce after taking time out is one of the things that a lot of companies are doing.  I think that would help a lot.  Another issue is just sheer numbers.  I mean, I think that, that when women have strong networks of support that it makes a difference.  I think numbers makes a big difference.  And it tends to change the character of the workplace.  But how we get from where we are now to there, I don't know the answer to that.  We're trying; we're producing lots of well-trained, brilliant, young MBA women. 

Recorded: 3/21/08