The current UK election campaign is the dog that isn’t barking. Characterised by what the Bishops have called ‘retail politics’, the parties have drawn up battle lines around eye-catching issues like immigration and the NHS, but seem unable to offer any underlying vision, to an increasingly cynical and lethargic electorate. Eve Poole FRSA argues for greater focus on what women bring to business.
It seems a long time ago that there were people queuing up outside Northern Rock trying to get their money out. Since then we have had reaction, re-organisation, and regulation, but have we yet had the revolution we need? In spite of all that has been done to shore up our financial institutions and restore trust in the system, January saw the delaying of the report into the collapse of HBOS until after the election, in order to spare some high-profile blushes. February? Swiss leaks. And in March, the Bank of England announced that 50 more instances of forex market rigging have been passed to the FCA for investigation.
Perhaps if the market is working so well we do not actually need politicians? Just a marketplace and some lawyers, and the media in case they miss anything. But if politicians do have a role, surely this is a tacit acknowledgement that markets left to their own devices will not give us the society we want, or indeed need. This society is in many ways guaranteed by ‘Big Society’ institutions, and inculcated within families, schools and communities. Many of the people involved in these are not economically active in a formal sense, but the contribution they make to the life of the nation is incalculably important. So the popular resonance of headlines about the Coalition's willingness to prosecute benefits cheats over tax cheats is unsurprising.
Would it be unfair of me to see a gender bias here? Traditionally, men went to work and women stayed at home in their communities. Much has changed, but not as drastically as might be assumed. Men are still over-represented in the higher echelons of business. Women still occupy the majority of roles in the education, charitable and cultural sectors, and do the most care-giving. But there is something deeper about this arrangement that is about biology. And while it is not fashionable to discuss it, it has a massive impact on the culture of the business sector and therefore its ability to reform.
The free market system absolutely assumes competition, on the grounds that it makes people try harder. This improves the quality of the market over time, as organisations vie with each other for market share, and people compete for jobs. So everybody wins? Well, the men involved certainly feel as though they are winning. The biology is simple and widely understood. In situations perceived as threatening, the body responds in ‘fight-or-flight’ mode, producing adrenaline to boost performance. This is why feeling stressed can be so alluring, because the fight mode is characterised by a temporary enhancement of both physical and neuro-biological functioning to provide the best possible chance of surviving.
What is less well understood is that this response is not a universal one. It is largely a male one. Before 1995, only 17% of test subjects in this field were women, and the fight-or-flight theory was originally based on studies on male rats. When these studies were carried out on humans, results from female subjects were discounted because variations in hormone levels caused by female reproductive cycles meant that their data was often confusing or difficult to interpret.
Shelley E. Taylor and her colleagues at the University of California became curious about why the data from females did not fit, and wondered if maybe the theory that was at fault, rather than the test subjects. When the tests were re-run, it became apparent that the fight-or-flight theory was predicated on the existence of testosterone. When women were involved, the stress response triggered the release of oxytocin instead, the ‘love hormone’ associated with peer bonding, affiliation and motherhood. Their paper, published in the Psychological Review in 2000, contrasted the male fight-or-flight response with the female response, which they dubbed ‘tend-and-befriend’.
This is usually explained as a difference in role from our cave-dwelling days, when the men were responsible for hunting and defence and the women for tending fires and children. In these conditions, fight-or-flight would give cavemen an evolutionary edge. Similarly, a stress response in women that was more about tend-and-befriend would enhance their ability to carry out their role under pressure. A protective response towards offspring, and the seeking out of social contact for mutual support and protection, would help to keep the fires and the children safe while the men scared off the sabre-toothed tigers.
Of course, we are not prisoners of our biology, and many women who have spent their careers working alongside stressed men may find that over time they have developed a Pavlovian fight-or-flight response, and can no longer remember experiencing tend-and-befriend instead. Neither is the male/female dichotomy that binary. But it is interesting to wonder what it would be like to encourage more 'female' tend-and-befriend behaviour in the boardroom. Apart from anything else, Game Theory suggests that co-operation between parties tends to yield better outcomes than a purely competitive strategy. This is because it focuses the parties on identifying classic 'win-win' solutions, that will increase the size of the pie, rather than just carving up a smaller one.
The business case for more women on boards is well understood, as summarised in the 2011 Davies Report. For example, companies with more women on their boards significantly outperform their rivals, with a 42% higher return in sales, 66% higher return on invested capital and 53 % higher return on equity. McKinsey data also shows that the ROI of companies with diverse exec committees exceeds by 41% those with wholly male executive committees. The economist Mikko Manner has shown that having a female chief executive is positively correlated with superior corporate social performance.
One caveat: research always shows that heterogeneous groups make better decisions than homogeneous ones, and it may be that women are merely a cypher for ‘diversity’, given how unrepresentative boards still are. But stress research would suggest that women have a specific role to play in difficult times, in keeping lines of communication open when the instinct might otherwise be to shut them down.
So, if I were in the business of retail politics, I would be thinking of a ‘women party’ as my underlying narrative; exploiting a once-in-a-generation opportunity to ratchet up the pace and scale of market reform. A huge bet on the power of female biology as the quickest way to change the culture of the market and, if the Game Theorists are right, the best way to improve the performance of the market too.
Eve Poole BA MBA PhD FRSA is Associate Faculty at Ashridge Business School, Chairman Designate of Gordonstoun, Chairman of Faith in Business, and Associate Research Fellow of the William Temple Foundation. Her book Capitalism’s Toxic Assumptions is published by Bloomsbury on 26 March. Twitter @evepoole