Balancing Masculine-Feminine Values in Investing

Halla Tomasdottir: Lack of balance is not sustainable, and it doesn't matter where you look in sort of our universe. Wherever we've had lack of balance, it's come to a halting stall or a cross or a meltdown at some point, and actually that did happen in Iceland -- there was excessive risk-taking; there was a lack of independent advice; people were basically measuring economic profit alone, with total disregard for the long-term consequences of the short-term profit, relentless pursuit of more.  I absolutely had worries about that, and I think all of us who came to the foundation of this company about a year and a half before this thing came tumbling down in Iceland knew that this was going to be something that wasn't going to be sustainable.  

We, from the foundation of our company, put together what we call Five Feminine Values, or Putting Feminine Values Into Finance.  To us, that doesn't mean that there is something wrong with masculine values per se.  It's just that we thought a more balanced approach was needed.

Number one, we wanted to give our clients independent advice -- not pushing our own products onto them but offering them sort of a variety of products from different sources and really giving them the independent advice on which ones are good and which ones are not.

One of my favorite ones is risk awareness.  We thought there was excessive risk in the system at the time, and often it is said that women are risk-averse, but our view is that they are more risk-aware.  What I mean by that is they like to understand the risks that they are going to take before taking them, and we think that's sort of the middle of the road approach. 

We also believe in emotional capital as much as financial capital, or another way we often put it is doing the emotional diligence as well as the financial due diligence.  People in the financial sector often look at past performances as the key predictor of future performances, but, in our view, it's actually people who make money and it's also people who lose money, so understanding the people factor -- who is behind the decision making, who is managing the money -- is also important to us.

We also believe in straight-talking, as you will probably gather from the way I talk.  That means we are willing and able from our set-up to tell our customers the truth, and we believe in telling them the truth, and sometimes that means going against the conventional wisdom or the herd behavior in the market.  

And all in all, this, to us, comes together under the umbrella value of profit with principles.  We want to make profit as a company, we want to make profit on behalf of our customers, but we really care how profit is made.  We want to have a wider definition of how we measure profit and look at the other aspects of social profits, environmental profit, if you will, as much as the economic profit.  So we sometimes call that a bigger definition of profits.

So it's all about balance, but if you take a look at the financial sector, it has been and still is largely comprised of men and more masculine values than feminine values for sure.

Now, in the wildest dreams of mine I could not have foreseen the almost total collapse of the financial sector of Iceland, but I knew there was going to be serious, serious problems ahead.  And so we were risk-aware and went with our gut feeling as much as our analytical and rational thinking, and we managed to protect our clients from taking any direct losses in the meltdown in Iceland.  So I found these values to be very helpful in our decision making then and still are, but they are the long-term approach, and sometimes in today's world we're so short-term oriented and our measures are so entirely driven by economic measurements that we don't always know how to measure a more sustainable approach, a more long-term approach to investing.

Directed / Produced by
Jonathan Fowler & Elizabeth Rodd

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