Search Here

Women may be better at executing mergers and acquisition business deals, a new study suggests.

Companies pay less for their acquisitions when there are more women on their corporate board, according to researchers.

Researchers at University of British Columbia's Sauder School of Business found that the cost of a successful acquisition is reduced by 15.4 percent with each female director added on a board.

Researchers also found that a company's attempted takeover bids are reduced by 7.6 percent for each additional female director on its board.

"Female board members play a significant role in mitigating the empire-building tendency of CEOs through the acquisition of other companies." Co-author Prof Kai Li said in a news release. "On average, merger and acquisition transactions don't create shareholder value, so women are having a real impact in protecting shareholder investment and overall firm performance."

The findings suggest that women are less interested in getting into risky transactions and are more likely to require the guarantee of higher returns on investment.

"Our findings show that the prudence exhibited by women directors in negotiating mergers and acquisitions has had a substantial positive effect on maintaining firm value," Li said. "This finding adds fire and force to recent calls to mandate a minimum number of women on the boards of publicly traded companies."

The findings will be published in the Journal of Corporate Finance.