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In these interesting times, the employees of financial organisations, from traders and managers to CFOs, are very much at the sharp end.

Minute by minute, their brains process a constant stream of fast-breaking data. Winners exult, losers despair; heart rates and hormones go wild. At the end of trading, the players trail wearily home, counting their profits or cutting their losses.

How do they do it? How does the financial brain make decisions? Are Britain's executives sleek thinking machines in sharp suits – or scurrying animals driven by hormones and emotion?

"In the West, we've lost sight of the fact that we're biological creatures," says neuroscientist Dr John Coates of Cambridge University.

A former Goldman Sachs trader, Dr Coates co-developed a groundbreaking study into the relationship between the financial performance of City traders and their levels of testosterone and cortisol.

The results showed a strong link between testosterone and profit and loss outcomes. By contrast, levels of the stress hormone, cortisol, were linked to market uncertainty. This has important implications for traders, since high levels of cortisol are associated with a greater aversion to risk.

"We share the basic biology of the stress response with other animals," says Dr Coates. "And it's important that managers understand this. They should be managing their traders like sports coaches do their star athletes."

But if older managers and CFOs are to understand how the rush of hormones in younger colleagues affect their decisions, they must first understand themselves.

Hormones and he-men

As people age, their testosterone production naturally drops off. Yet this does not explain why an aggressive, decisive style of decision-making remains common among senior executives, as they ascend the corporate hierarchy.

One reason is that testosterone production varies widely between individuals. A 50-year-old CFO, for example, might have higher testosterone levels than a trader of 25.

But many other factors are involved. "When scientists look at the effects of testosterone on risk taking, they aren't saying it's the only thing affecting risk or motivation," says Dr Coates.

"A lot of other things affect motivation as well. We don't think risk and market volatility is a one-variable phenomenon."

Ajit Chambers agrees. The former banker is the founder and financial director of The Old London Underground Company, which is developing plans to reopen disused London Underground stations as tourist venues.

"Personally, I don't think the testosterone level is lower in older men," says Chambers. "With senior executives, their decisions create an excitement that's equal. That's why they call them the silverbacks.

"Once they draw on that energy, it doesn't matter what their testosterone levels are – they have the energy and the mindset to win."

Dr Coates highlights another potential factor affecting executive hormones. "I think they would be magnified the further up they go, because they're getting a rush from moving up the hierarchy," he says.

But if hormones alone cannot fully account for silverback behaviour, what role do their brains play? An individual's decision-making style is associated with many areas of the brain. The highly evolved prefrontal cortex, for example, is the seat of analytical thinking, basic personality, and rational thought.

Less reputable, and tucked away in various closets deeper down, are the older, more instinctual areas. They include the amygdala – associated with strong emotions and the fear response – and the nucleus accumbens, the brain's 'thrill centre', which thrives on excitement and stimulation, particularly in young men up to about 30.

How entrepreneurs think

The interplay between the rational and emotional parts of the brain and its effect on decision-making has been the subject of some revealing research, carried out by a team led by Barbara Sahakian, Professor of Clinical Neuropsychology at Cambridge University.

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