Journal of Business Ethics

, Volume 131, Issue 3, pp 577–594 | Cite as

Are Female CEOs and Chairwomen More Conservative and Risk Averse? Evidence from the Banking Industry During the Financial Crisis

  • Ajay Palvia
  • Emilia Vähämaa
  • Sami Vähämaa


This paper examines whether bank capital ratios and default risk are associated with the gender of the bank’s Chief Executive Officer (CEO) and Chairperson of the board. Given the documented gender-based differences in conservatism and risk tolerance, we postulate that female CEOs and board Chairs should assess risks more conservatively, and thereby hold higher levels of equity capital and reduce the likelihood of bank failure during periods of market stress. Using a large panel of U.S. commercial banks, we document that banks with female CEOs hold more conservative levels of capital after controlling for the bank’s asset risk and other attributes. Furthermore, while neither CEO nor Chair gender is related to bank failure in general, we find strong evidence that smaller banks with female CEOs and board Chairs were less likely to fail during the financial crisis. Overall, our findings are consistent with the view that gender-based behavioral differences may affect corporate decisions.


Female CEOs Chairwomen Bank capital ratios Bank failures Financial crisis 

JEL Classification

G01 G21 G30 G32 



We wish to thank two anonymous referees, David Aristei, Allen N. Berger, Gerald P. Dwyer, Jason Park, Seppo Pynnönen, Daniel A. Rogers, and seminar participants at Stockholm University, Hanken School of Economics, Pablo de Olavide University, the Office of the Comptroller of the Currency, the 53rd Southern Finance Association Meeting, the 49th Eastern Finance Association Meeting, the 25th Australasian Finance and Banking Conference, and the 16th International Conference on Macroeconomic Analysis and International Finance for insightful comments and discussions. E. and S. Vähämaa gratefully acknowledge the financial support of the Academy of Finland, the Foundation for Economic Education, the Marcus Wallenberg Foundation, and the NASDAQ OMX Nordic Foundation. All views expressed in this paper are those of the authors alone and do not necessarily reflect those of the Office of the Comptroller of the Currency or the U.S. Department of the Treasury.


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Copyright information

© Springer Science+Business Media Dordrecht 2014

Authors and Affiliations

  • Ajay Palvia
    • 1
  • Emilia Vähämaa
    • 2
    • 3
  • Sami Vähämaa
    • 3
  1. 1.Office of the Comptroller of the CurrencyWashingtonUSA
  2. 2.Department of Finance and StatisticsHanken School of EconomicsVaasaFinland
  3. 3.Department of Accounting and FinanceUniversity of VaasaVaasaFinland

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