Social Shareholder Activism: We Need More Women Board Members

Social Shareholder Activism: We Need More Women Board Members

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A University of Notre Dame study finds that more female board members leads to less M&A. The companies that have 2 women directors is less active when it comes to buyouts. So much that their acquisition rate is 20% lower than other companies. And for the deals they are doing, the average buyout size is 10% lower than other companies.

Why is that? Are women just more risk averse? Or are they more prudent, where over half of M&A deals end up being worthless. It might just be that more diverse boardrooms, whether it be women or those with diverse backgrounds, is good for corporate governance.

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But back to women, it goes beyond just M&A. Having women on the board, of which 20% of S&P 500 companies have a woman on the board, lead to higher returns on equity and better stock performance. At what point does social activism find its way into the activist playbook? The idea of a more diverse boardroom yielding a better company is nothing new. But, yet again, the majority of the activist hedge fund world is compiled of older white guys.

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