Female board members take more risk than male board members?!?

Found via this article:

The German central bank's research found that female board members were more likely to take risks with a bank's finances than their male counterparts.

It urges financial institutions to be cautious when re-addressing the gender balance: "Employing a higher proportion of female board members significantly increases risk taking."

[...T]hose women who have scaled the corporate ladder and smashed through the glass ceiling tend to be less experienced than men in a similar position.

In more technical terms as this study is available online:

Executive board composition and bank risk taking - Allen N. Berger, Thomas Kick, Klaus Schaeck - 2012

The socio-economical composition of a company’s executive board is highly relevant for economic and social policy. For example, gender quotas are often advocated to improve career outcomes for females and ‘break the glass ceiling’. Similarly, educational requirements for bank boards have been proposed in the past as a means to improve corporate governance. However, little is known about the effects on firm outcomes of having more female, more educated or older board members. Do female board members really force a less risky conduct of business? Do educated board members increase or reduce bank risk-taking? And does the age of executive board members matter?

We construct a unique dataset for the entire population of German bank executive teams for the period 1994 – 2010. Exploiting this dataset, we examine how the age, gender, and education composition of banks’ executive boards affect bank risk taking. In our first test, we empirically establish that age, gender, and education affect the observed volatility of bank profits. In a second step, we compare banks which experienced changes in board structure to similar banks without such a change. Generally, changes in board structure could be symptoms of underlying trends in a bank’s business model. For example, shareholders might appoint directors with similar views regarding the bank’s optimal strategy. Such underlying trends would confound our analysis, as we would attribute the changes in risk taking to the new board structure. We circumvent this problem by only considering board changes due to the retirement of a board member. This strategy allows us to capture the impact of a younger, more female or more experienced board.

We obtain the following key results. First, we show that younger executive teams increase risk-taking. Second, board changes that result in a higher proportion of female executives also lead to a more risky conduct of business. Third, if board changes increase the representation of executives holding Ph.D. degrees, risk taking declines. This has important policy implications: while quotas regarding the age, gender and education of an executive directly affect the representation of different groups on executive boards, they have a knock-on effect on corporate outcomes.

This should debunk some stereotypes frequently found online.