New research from Dr. Valeriya Vitkova from Bayes Business School reveals that companies with greater gender diversity in top leadership positions experience fewer leaks of confidential information about merger and acquisition plans. Compared to boards “with male-dominated leadership,” deal leak incidents are significantly reduced where there are “at least 30% female executives on the board”. Vitkova’s research “suggests women are more stakeholder-oriented and cautious than men, …[and] the likelihood of misconduct is lower with a higher proportion of female board members.” The findings underscore the importance of including more women in leadership roles to enhance the integrity of business transactions.
Key findings include:
- Targets with at least 30% female executive board members experience a reduction in deal leak incidents from 8.6% to 6.7%.
- When both executive and non-executive directors have 30% female representation, deal leak incidents drop even further to 3.2%.
- Completion rates for leaked deals decrease significantly for targets with higher gender diversity, dropping from 84% to 33%.
Understanding the relationship between gender diversity in leadership and the confidentiality of mergers and acquisitions is crucial for companies for several reasons. First and foremost, maintaining deal confidentiality is essential for preserving market integrity, preventing insider trading, and ensuring fair competition. By recognizing that greater gender diversity in top leadership correlates with fewer leaks of confidential information, diversity initiatives can be a strategic measure to enhance business integrity. Additionally, this research underscores the broader benefits of diversity in leadership, highlighting how diverse perspectives can lead to more prudent decision-making and risk management practices. Ultimately, by promoting gender diversity in executive roles, companies can mitigate the risk of information leaks and foster a culture of inclusivity and innovation that drives long-term organizational success.
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