White Men Over the Age of 45 reprised

UPDATE: Bank of America heiress is lambasting the executives at the top.

"The granddaughter of the man who founded Bank of America in San Francisco in the early 1900s called the bank's current condition "totally repulsive" and blasted the bank's management for being 'idiots'." WATCH

I've mentioned before in this blog my friend, Mark, who after the savings & loan debacle said, "If those in power stereotyped themselves, no one would put money in banks run by white men over the age of 45."

This was again brought to mind last week when the mostly all white CEOs of America's largest banks appeared before the House Financial Services Committee. Not surprisingly, this followed a strikingly similar scene a day earlier in Great Britain when (as reported by the Washington Post) Britain's bankers Fred, Tom, Andy, Dennis, Eric, John, Stephen, Antonio and Paul were called before Parliament's Treasury Select Committee.

Why do I reprise this? Because I don't agree with the President and others who say that what we are facing is "a failure in confidence". I believe that what we are facing is misplaced confidence and failures of executives and boards.

Bear with me while I pull several threads together.

First, several years ago in conjunction with FORTUNE's most powerful women issue, the magazine studied companies that have managed to get a significant number of women to the top. These companies are characterized by a relentless focus on measurement. It makes sense that if true performance (not perceptions) is the measure by which people are promoted that a higher percentage of the 50% of women who make up the pipeline will make it to the top. So, it's safe to say that well-run companies will have more women at the top. It seems logical that if a company has a full pipeline, but doesn't have a significant number of women at the top, it isn't being run with a focus on true performance (in other words, less than well-run).

And research bears this out. Studies by Catalyst have found that companies with more women at the top generate higher total return to shareholders than those that don't. Unlike some, I don't say that it's the women at the top that account for the higher TRS, it's that truly well-run companies will naturally have more women at the top. The behavior of women has also been described by studies and stories to be highly ethical (think about the whistle blowers at Enron).

Several studies have indicated that having a critical mass of women on boards also is an indicator of enhanced business performance.

So, we have a virtuous cycle of companies that are well-run, promoting more women to the top, and likely having more women on boards. (Lest you think there's no problem with boards today, read this earlier post here.)

For my book I've been researching the remarkable turnaround of Xerox that was led by Anne Mulcahy. One of the decisions she and her CFO made was to make no financial move that they didn't understand. This is a brilliant executive decision. I would suggest that it is a decision that executives in financial institutions - and the boards that hold them accountable for strategy execution, organizational viability and keeping shareholders whole - should adopt. Actually it's a decision that every CEO and board should be guided by.

But, instead we have companies and boards that choose people to get to the top on the basis of considerations that have less to do with competence and performance (although they would argue otherwise) than they have to do with style and membership. We have a shortage of women at the top - and as several studies have suggested, a related absence of willingness to challenge the ethics of decisions. And we face, yet again, catastrophic failure of these highly compensated men who have brought ruin to the economy and our citizens.

Of course, I am going to suggest that things have to change and change radically. But, I'm not alone. Again, as reported in the Washington Post (see link above), men are thinking the same.

"There are quite a lot of alpha males with testosterone steaming out their ears," said Stuart Fraser, one of London's top financial sector officials.

"Clearly, something needs to change," said Howard Archer, chief European and U.K. economist at IHS Global Insight in London. "You can argue that the men have made a right mess of it, and now the ladies should have a go."

Now, I disagree that it's gender alone that will make the difference. I believe that the lenses through which competence is viewed have to be cleaned up, the measures by which readiness for promotion have to be rethought and promotion on the basis of "membership" in the "boys club" have to cease in order to get highly qualified women to the top. FORTUNE has found companies that do this. Would that there were more.

Lead On!
Susan
Susan Colantuono is CEO of Leading Women. She blogs on networking for PINK Magazine. Follow her on Twitter.