The larger the proportion of women on a board of a company, the fewer acquisitions it engages in, says a study."We found that this effect existed even if we looked at firms with a single female director on the board," said one of the researchers Craig Crossland from the University of Notre Dame in Indiana, US.The researchers studied almost 3,000 acquisitions between 1998 and 2010 in the US."A change in female board representation from low to high levels was associated with an 18 percent decrease in acquisitiveness, a 12 percent decrease in acquisition size and a reduction of $97.2 million in merger and acquisition spending in a given year," Crossland noted.
In the study, published in the Strategic Management Journal, the researchers noted that increasing the proportion of female directors changes the dynamics of intra-board interactions."Groups comprised of distinct categories of people operate differently than groups where everyone shares similar characteristics," Crossland said. Diverse groups tend to engage in discussions that are more thorough, more contentious and more likely to identify problems with the topic at hand. "We think the boards with higher female representation are more likely to identify these challenges in a given deal, increasing the likelihood that it will be delayed or shelved entirely," Crossland explained. Crossland emphasised that the researchers are not making any claims that female directors differ from male directors in terms of dispositional tendencies such as risk-taking propensity or openness to experience.