Do ‘Lehman Sisters’ work in China? Women on boards and bank risk

We investigate how women on boards impact bank risk in China. Using a merged dataset containing 83 Chinese banks for the period of 2006–2019, we find that more women on boards could reduce bank risk in China. We further provide the evidence that risk-averse nature of women directors motivates them to organize more board meetings in order to lower bank risk. Additionally, women executive directors play the main role in reducing bank risk and a critical mass (three or more) of women directors intensifies the negative impact on bank risk. Our results still hold when we use lagged variables, GMM regression technique, instrumental variable and DID estimation. Our study could provide valuable empirical advice for the policy makers in both China and other developing countries.