Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Women directors better at mergers and acquisitions

25.11.2013
The more women there are on a corporate board the less a company pays for its acquisitions, according to a new study by researchers at UBC's Sauder School of Business.

The forthcoming Journal of Corporate Finance paper shows the cost of a successful acquisition is reduced by 15.4 per cent with each female director added on a board. It also reveals that each additional female director reduces the number of a company's attempted takeover bids by 7.6 per cent.

"Female board members play a significant role in mitigating the empire-building tendency of CEOs through the acquisition of other companies." says Sauder finance professor Kai Li, who co-authored the study. "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 researchers say their results suggest women are less interested in pursuing risky transactions and require the promise of a higher return on investment.

For the study, the researchers analyzed a large sample of acquisition bids made by S&P 1500 companies in the United States between 1997 and 2009.

To determine the cost of the acquisitions, the researchers looked at the bid premium – the difference between the final offer price and the stock price of the targeted firm before the deal was signed. These figures were then correlated with the number of women directors on the various boards.

"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," say Professor Li. "This finding adds fire and force to recent calls to mandate a minimum number of women on the boards of publicly traded companies."

Background:

Earlier this month, the Ontario Teachers' Pension Plan, the largest single-profession pension plan in Canada, formally requested the Ontario Securities Commission to require all companies listed on the Toronto Stock Exchange to have at minimum of three women on their board of directors by 2020 or face delisting from the exchange.

The study "Director Gender and Mergers and Acquisitions," was accepted for publication by the Journal of Corporate Finance in November 2013, and was co-authored by Sauder finance professor Maurice Levi and former Sauder PhD student Feng Zhang, now an assistant professor at the University of Utah.

Andrew Riley | EurekAlert!
Further information:
http://www.ubc.ca

More articles from Studies and Analyses:

nachricht When a fish becomes fluid
17.12.2018 | Institute of Science and Technology Austria

nachricht Some brain tumors may respond to immunotherapy, new study suggests
11.12.2018 | Columbia University Irving Medical Center

All articles from Studies and Analyses >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Data storage using individual molecules

Researchers from the University of Basel have reported a new method that allows the physical state of just a few atoms or molecules within a network to be controlled. It is based on the spontaneous self-organization of molecules into extensive networks with pores about one nanometer in size. In the journal ‘small’, the physicists reported on their investigations, which could be of particular importance for the development of new storage devices.

Around the world, researchers are attempting to shrink data storage devices to achieve as large a storage capacity in as small a space as possible. In almost...

Im Focus: Data use draining your battery? Tiny device to speed up memory while also saving power

The more objects we make "smart," from watches to entire buildings, the greater the need for these devices to store and retrieve massive amounts of data quickly without consuming too much power.

Millions of new memory cells could be part of a computer chip and provide that speed and energy savings, thanks to the discovery of a previously unobserved...

Im Focus: An energy-efficient way to stay warm: Sew high-tech heating patches to your clothes

Personal patches could reduce energy waste in buildings, Rutgers-led study says

What if, instead of turning up the thermostat, you could warm up with high-tech, flexible patches sewn into your clothes - while significantly reducing your...

Im Focus: Lethal combination: Drug cocktail turns off the juice to cancer cells

A widely used diabetes medication combined with an antihypertensive drug specifically inhibits tumor growth – this was discovered by researchers from the University of Basel’s Biozentrum two years ago. In a follow-up study, recently published in “Cell Reports”, the scientists report that this drug cocktail induces cancer cell death by switching off their energy supply.

The widely used anti-diabetes drug metformin not only reduces blood sugar but also has an anti-cancer effect. However, the metformin dose commonly used in the...

Im Focus: New Foldable Drone Flies through Narrow Holes in Rescue Missions

A research team from the University of Zurich has developed a new drone that can retract its propeller arms in flight and make itself small to fit through narrow gaps and holes. This is particularly useful when searching for victims of natural disasters.

Inspecting a damaged building after an earthquake or during a fire is exactly the kind of job that human rescuers would like drones to do for them. A flying...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

VideoLinks
Industry & Economy
Event News

ICTM Conference 2019: Digitization emerges as an engineering trend for turbomachinery construction

12.12.2018 | Event News

New Plastics Economy Investor Forum - Meeting Point for Innovations

10.12.2018 | Event News

EGU 2019 meeting: Media registration now open

06.12.2018 | Event News

 
Latest News

Pressure tuned magnetism paves the way for novel electronic devices

18.12.2018 | Materials Sciences

New type of low-energy nanolaser that shines in all directions

18.12.2018 | Physics and Astronomy

NASA research reveals Saturn is losing its rings at 'worst-case-scenario' rate

18.12.2018 | Physics and Astronomy

VideoLinks
Science & Research
Overview of more VideoLinks >>>