London, March 13 (IANS): Companies that have women on their driving seat are highly valued by investors and shareholders, finds a new study.

Firms with women on their executive and supervisory boards are rated high on the bourses as a result of the few women who climbed to the top of the career ladder in companies without a gender quota.

The study revealed that share prices fell by two percent on an average following the sudden departure of a woman director.

In the cases where a man replaced a woman, there was an even bigger drop of three percent.

Conversely, when the departing board member was a man, the share prices remained steady.

"Women who have reached the highest management level without the help of a mandatory gender quota therefore contribute more value to a firm than their male peers," said Daniel Urban from the Technical University of Munich in Germany.

Further, the analysis showed that the shareholders do not value women per se more highly.

Rather, they evidently judge the actual performance delivered by a firm's executive and supervisory boards under women.

The proportion was, for example, just three percent in Japan, eight percent in the US, and 20 percent in the Philippines.

In those countries where it was particularly hard for women to make it to the top, there was a bigger fall in the share price following their departure.

"This effect reflects the harsh selection process, whereby women have to deliver significantly better performance than their male peers. So their departure then produces a correspondingly greater impact," Urban noted.

To ascertain the fact, the team studied the share price development of companies following the exit of top managers due to death or illness.

They looked at around 3,000 cases in 51 countries where no gender quota requirements were in place during the selected period (1998 to 2010).

It involved studying the share price movements of companies following the exit of executive or supervisory board members due to death or illness.

"Our approach may seem a little morbid, but it allowed us to minimise the influence of other factors," explains Urban.

The investigation showed that by no means women are less competent supervisory board members, but, the gender quota has resulted in a situation where the best executives have not always been selected for the job.

"Firms need to improve their processes for selecting board members they should apply the same standards for both men and women. By putting women managers on an equal footing, they could increase their firm's value," the researchers suggested.

The findings were presented at the American Finance Association 2016 San Francisco Meetings Paper.