Women on bank boards and risk-taking: A cross-countries analysis on the moderating role of masculinity

Carmen Gallucci,Rosalia Santulli,Riccardo Tipaldi

doi:10.22495/cocv17i3art5

Carmen Gallucci, Rosalia Santulli + Show 1 more

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https://doi.org/10.22495/cocv17i3art5

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Abstract

This study examines the effects of board gender diversity on a bank’s risk by applying a moderate multiple regression analysis on a dataset covering the years 2008-2017 and comprising 110 banks from Germany, Italy, Spain, and Switzerland. Masculinity, a country-level cultural dimension incorporating the behavioural expectations surrounding men and women in a society, is used as a moderator. Results suggest that high country-level masculinity stresses the risk-aversion of a bank’s women directors, therefore compromising financial performance. To mitigate the negative effects of high country-level masculinity, this paper provides several suggestions. First, banks should change their stereotypical depiction of the “ideal worker”. Second, banks should question the cultural motives underpinning the entrance of women directors in the “boy’s club”. Last, banks should create a more egalitarian workplace where the distribution of rewards does not strengthen the privileges of the established elites.

Highlights

In recent years, gender diversity has been attracting the interest of scholars, practitioners and policymakers (Baker, Pandey, Kumar, & Haldar, 2020; de Cabo, Gimeno, & Nieto, 2012; Terjesen, Aguilera, & Lorenz, 2015)
In this paper, we look at a country-level cultural dimension, the masculinity, as a moderator of the effect of board gender diversity on bank risk-taking
As the empirical evidence suggests that country-level masculinity moderates the relationship between the board gender diversity of a bank and a bank's risk-taking in a way that women directors become even more risk-averse, the following are a series of suggestions for creating a more gender-mature workplace in the banking sector

Summary

Introduction

Gender diversity has been attracting the interest of scholars, practitioners and policymakers (Baker, Pandey, Kumar, & Haldar, 2020; de Cabo, Gimeno, & Nieto, 2012; Terjesen, Aguilera, & Lorenz, 2015). The present paper examines the effects of board gender diversity on a bank’s risk and discusses the link with bank performance. Women directors are likely not to advocate aggressive credit growth (Del Prete & Stefani, 2015), but rather to induce a bank to hold more conservative levels of capital (Palvia, Vähämaa, & Vähämaa, 2015; Skała & Weill, 2018). Such business conduct may be beneficial for a risky bank in turbulent times. Understanding which factors may stress the risk-aversion of a bank’s women directors is relevant for academics, policymakers, and practitioners alike

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