Risk culture, board gender-diversity and bank risk

The study examines the impact of corporate risk culture and board gender diversity on bank risk behaviour. Using the competing value framework, we assess the corporate risk culture of 120 US banks and bank holding companies for 2004–2023. Our empirical evidence shows that board gender diversity, when interacting with risk culture, reduces bank risk. It further confirms that the presence of female directors influences the risk culture when the number of women reaches a critical mass. These findings also demonstrate that greater board gender diversity has led to lower bank risk levels in the post-2009 period. The findings are robust to alternative proxies for bank risk, risk culture, and to sub-sample analysis. The results support the regulatory stance of ‘tone from the top' as an important driver of corporate culture affecting bank risk.