We often hear that women need to step up their understanding of finance to land a seat on a corporate board. But, according to the study "Financial Literacy Around the World: An Overview", published in 2011, women seem to know as much as men when it comes to matters of finance. What they often lack is a command of the language of finance, which would make it easier for them to join the conversation in the boardroom.
According to the study's author, Annamaria Lusardi, a professor of economics and accountancy at George Washington University, women were less likely to answer questions correctly when financial jargon was used, but that didn't necessarily mean that the women were more ignorant. Women relied on the "do not know" option far more often than their male counterparts. But when the "do not know" option was eliminated, women were no more likely to pick a wrong answer than men. Said Lusardi, when "forced to pick an answer, women seemed to know as much as men."
This finding supports the notion that women are more cautious and more risk averse. "Women," said Dr. Lusardi, "are aware of their lack of knowledge while men are less willing to admit what they don't know." Cultural stereotypes add to the pressure men feel that they must be financial experts and have convinced women that they know less than they actually do.
Formal education hasn't kept pace with the complexities of modern investing, notes Meg Thakor of MoneyZen Wealth Management. Men and women are confused, but women may be more willing to ask for information.