Could “Lehman Sisters” reduce bank risk‐taking? International evidence

Research question/issue Since the global financial crisis triggered by collapse of Lehman Brothers, board gender diversity has attracted growing attention among academia and policy makers. The “Lehman Sisters” hypothesis argues for more female representation on bank director boards based stereotyped gap in risk preference, which been widely supported empirical studies nonfinancial firms. However, due to constraint data unavailability, research risk-taking is relatively scarce mostly confined individual developed markets with inconclusive findings. In this paper, we examine impact using a large hand-collected dataset covering 480 commercial banks across 18 21 developing countries over period 2007–2016. findings/insights We find that lower associated greater diversity, supporting international context; however, effect significantly weakened hostile perception toward working women. also confirm critical threshold three directors play significant role reducing risk-taking, providing novel evidence support mass theory from banking sector. Theoretical/academic implications Our findings help reconcile existing contradictory different highlighting importance cultural effects. Practitioner/policy provide first policies aimed promote women boards, particularly number important avoid tokenism problem. less women, makers need work improving overall environment order achieve expected outcome.