Female directors and firm performance following mergers and acquisitions

This study investigates whether higher percentages of female directors contribute to firm performance after merger and acquisition activity (M&A). Resource dependence and human capital theories are used to develop the hypothesis that gender-diverse boards are of particular benefit in an M&A setting that requires complex decision-making and close monitoring. Using a sample of 56 Singaporean acquirers and 126 Australian acquirers with single M&A events to avoid confounding and a timeframe of 5 years before and after a single M&A between 2005 and 2012, the percentage of female directors is associated with better firm performance in the years after the M&A. Our results remain robust to alternative proxies for female directors. Using data from two countries with comparable mature capital markets and jurisdictional conditions, the results provide evidence to contribute to the debate on gender targets for boards.