A recent paper published by the INSEAD business school examined whether the same principle applies when a company announces share buybacks. The study concluded this was not the case.
It seems that companies with more women board members are more likely to announce share buybacks. Since buybacks increase risk, this is inconsistent with the hypothesis that women are more risk averse. Furthermore, post-announcement extra returns are lower when there are more women on the board.
Better insider information or ethics?
It appears that male-dominated boards may have better information and thus are able to judge better whether their own stocks are undervalued. So men are not excessively self-confident; they just have better access to information. Men engage in insider trading more often than women and earn superior returns as a result. It is also probably true that women have less access to high quality information since they are not part of the predominantly male information network.
A share buyback can be considered a form of collective insider buying. This indirect insider trading is not illegal but some may consider it unethical. Does this perhaps mean that women are more ethical than men? According to the article, the gender effect is less significant when the CEO is a woman. Boards with more women also tend to issue shares at moments when the stock is undervalued. Therefore the hypothesis concerning the information advantage of men would appear to be more convincing.
-jk-