Does workforce gender diversity influence banks' high-level decisions? Evidence on credit growth and risk-taking

Official URL: https://dx.doi.org/10.1080/1540496X.2026.2713727

We investigate the impact of workforce gender diversity on the relationship between women’s representation on boards of directors and in other decision-making bodies and bank performance, specifically in terms of credit growth. Using hand-collected panel data on Turkish banks from 2006 to 2020, we find that female board directors and managers, alone, correlate negatively with credit growth, consistent with stronger monitoring, stricter screening, or more conservative lending policies. This association is moderated by the gender composition of the workforce. The results suggest that the relationship between female leadership and bank lending is conditional on the broader organizational context: female directors and executives are associated with lower credit growth when female workforce representation is low, but this negative association weakens and, in some specifications, reverses when female workforce representation is higher. Additional tests on asset composition and risk outcomes suggest that this conditional lending response is not accompanied by systematically weaker bank-risk outcomes.