Companies save money on acquisitions for each female board member doing the buying, a new study says.

A survey covering thousands of acquisitions by S&P 1500 companies between 1997 and 2009 says the more women there are on a corporate board the less a company pays for its acquisitions.

The recently-published paper shows the cost of a successful acquisition is reduced by 15.4 per cent with each female director added on a board. It also calculates that each additional female director reduces the number of a company's attempted takeover bids by 7.6 per cent.

“Female board members play a significant role in mitigating the empire-building tendency of CEOs through the acquisition of other companies,” says University of British Columbia finance Professor Kai Li, co-author of the study.

“On average, merger and acquisition transactions don't create shareholder value, so women are having a real impact in protecting shareholder investment and overall firm performance.”

The results have been attributed to a number of factors.

Researchers say women are less interested in pursuing risky transactions, and also require the promise of a higher return on investment.

They also suggest the ‘empire-building’ tendencies of male-dominated boards can make them willing to pay more than is necessary, rather than continue negotiation or back away entirely.

To determine the cost of the acquisitions, the researchers looked at the bid premium – the difference between the final offer price and the stock price of the targeted firm before the deal was signed. These figures were then correlated with the number of women directors on the various boards.

“Our findings show that the prudence exhibited by women directors in negotiating mergers and acquisitions has had a substantial positive effect on maintaining firm value,” says Professor Li.

“This finding adds fire and force to recent calls to mandate a minimum number of women on the boards of publicly traded companies.”

More information is available from the full report.