Investors favour cos with women board members

Companies with women on heir executive and supervisory boards are valued more highly by the stock markets, especially if they made it to the top without a gender quota, a new study has found. Investors rate their performance as being bet er than that of their male peers, researchers said.
Economists from Technical University of Munich (TUM) and University of Hong Kong studied share price development of companies following he exit of top managers due to death or illness in a sample of around 50 countries. 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).

The study shows that share prices ell by 2% on average following the sudden departure of a woman director. In cases where a woman was replaced by a man, there was an even bigger drop of 3%. Conversely, when the departing board member was a man, the share price 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, of Technical University of Munich.

The second part of the analysis shows that 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.

The researchers came to this conclusion by looking at the representation of women on the executive and supervisory boards of companies in the countries studied. The proportion was just 3% in Japan, 8% in US and 20% in the Philippines.