Equity REITs with Female Directors Outperform those with All-Male Boards


Peter Grant of the Wall Street Journal reports that a new study by Wells Fargo Securities "determined that companies with more than the average percentage of women" on their board "achieved higher average price and total returns over that period," [referencing 165 equity REITs from 2006 to 2017].

The real-estate industry has historically been a sector with overwhelming male presence but the movement towards gender equality in workplace representation has now recieved a welcome ally:

The share prices of REITs with higher-than-average percentages of women on their board outperformed those with no female representation by 1.93% to 2.33%. The outperformance was 1.33% to 1.69% when both share price and dividend were taken into account.

Wells Fargo's methodology in bringing forth this analysis consisted of analyzing board compositions at year-end from 2006 to 2017 and then calculating share price and total return over a forward three - and - five-year period.

The report states, "[t]here is already a considerable volume of research that delves into the benefits of a more inclusive board ... [o]ur purpose here is to shine a spotlight on board diversity in real estate."

Wells Fargo Securities found in its research that the average percentage of women on REIT boards are around 15.5%. REITs have boosted female representation on their boards in the past decade to 15.5% from about 8.5%, but REITs still lag the 22% female representation found on other boards of companies within the S&P 500.

Of the equity REITs analyzed in the study it is important to note that 34 had no women on their boards, and only 40 REITs had women constitute at least one-quarter of board members. It's clear that progress has been made - but, evidently, much work is left to be done.

WSJ: Peter Grant

Published: March 6th, 2018

Source: WSJ ("REITs With Women on Their Boards Outperform Those With Only Men")

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