REITs With Women on Their Boards Outperform Men-Only Boards

Real estate has a reputation of being an old boys’ network, and while the average female representation on REIT boards has grown from 8.5% in 2006 to 15.5% in 2017, the industry still lags the 22% female representation on other boards of companies in the S&P 500. Now research is showing the lower level of diversity on REIT boards could be having a negative impact on results. From the Wall Street Journal:

That is the conclusion of a new report by Wells Fargo Securities that analyzed 165 equity REITs from 2006 to 2017. The analysis “determined that companies with more than the average percentage of women” on their boards “achieved higher average price and total returns over that period,” the report stated.

The average percentage of women on REIT boards was 15.5%, the report said. The share prices of REITs with higher-than-average percentages outperformed those with no female representation by 1.93 to 2.33 percentage points, according to the report. The outperformance was 1.33 to 1.69 percentage points when both share price and dividend were taken into account…

Of the equity REITs analyzed by Wells Fargo, 34 had no women on their boards. Women made up at least one-quarter of boards at 40 REITs, the report said.

Wells Fargo’s methodology consisted of looking at board compositions at year-end from 2006 to 2017 and calculating share price and total return over a forward three- and five-year period.