The Management Change That Leads to More Thoughtful Decision-Making

A new study has found an interesting consequence of having more women on a company’s board of directors: Fewer acquisitions.

The researchers, from INSEAD, the University of Notre Dame, and Singapore Management University, looked at 1500 S&P companies between 1998 and 2010. On average, about 10 percent of the board members of these companies were women. (Had the data been collected last year, the number would have been closer to 17 percent). Then they looked at how many acquisitions each company made during that time, and how large the acquisitions were. It turned out that compared with all-male boards, companies with just two women on their board of directors:

• Made 18 percent fewer acquisitions
• Spent 12 percent less on purchasing other companies
• Spent $97.2 million less on acquisitions each year

This study found differences in company behavior even if only one woman was on the board. “We tried to look for an inflection point, that hockey-stick curve,” says Craig Crossland, an associate professor of management at the University of Notre Dame and one of the researchers. “We didn’t see that. The effect kicks in pretty quickly and increases the more representation you have.”

Read the entire story on the Inc. website.