It’s said men are less likely to ask for directions. When it comes to high level business decisions, a new Sauder School of Business study shows the stereotype holds true.

Corporate boards that include women are more likely to seek help from financial advisors when their firm is faced with a takeover offer, according to a new study in the Journal of Risk and Financial Management by Professors Maurice Levi and Kai Li and their former doctoral student Feng Zhang.

“Typically, it’s wise to ask others for advice,” says Levi, the Bank of Montreal Chair in International Finance at Sauder. “Takeovers are a risky business, and boards can face litigation if they don’t get a high enough price for their firm.”

The researchers chalk up the findings to the fact that women are less likely to have an overinflated view of their own abilities.

“Forgoing advice is often a symptom of overconfidence,” Levi says.

A 10 per cent increase in female directors on the board of a firm targeted for an acquisition is tied to a 7.6 per cent increase in the likelihood of engaging a top-ranked financial advisor.

The authors say this aligns with their previous research finding that the more women there are on a board, the less likely the firm will pursue takeovers.

They say their research strengthens their belief that the ongoing push for gender diversity on corporate boards will have a sizeable impact on business practices.

“Women truly do make a difference in business,” Levi says.

“Even just having one woman on a corporate board does more than just satisfy some inclusionary requirement; it makes a tangible difference to how business gets done.”


The study, “Are Women More Likely to Seek Advice than Men? Evidence from the Boardroom,” is published in this month’s edition of the Journal of Risk and Financial Management. It was co-authored by Assistant Professor Feng Zhang of the David Eccles School of Business, who completed his PhD at UBC’s Sauder School of Business.

The study sample was made up of S&P 1500 firms, and included bidder boards involved in 7,967 mergers and acquisitions between 1997 and 2010, and the target boards of 3,563 such deals.