Real estate investment trusts that have a woman on their boards enjoy better performance than REITs will all-male boards, according to a new study by Ferguson Partners and FPL Associates.
According to the study released this month, the returns for REITs with a woman on their boards for more than three years was 2.6 percentage points higher than those that did not. The difference was 3.6 percentage points higher than peers with all-male boards over a five-year horizon and 3.4 percentage points higher than their peers over a 10-year horizon.
Executives at Ferguson Partners, an executive recruiting firm, and FPL Associates, a management consultant, looked at year-end 2010 data of 160 REITs, measuring the impact on returns of various board characteristics, said Loren Croskey, vice president in FPL Associates' consulting practice, in an interview.
Characteristics investigated included board size, meeting frequency, compensation levels and percentage of independent directors, said Bill Ferguson, co-chairman and co-CEO of FPL Advisory Group LLC, the holding company for both firms.
The only characteristic that had a meaningful relationship with performance was whether there was a woman on the board, he said.
“A lot of REITs were founded by strong-willed, typically male CEOs who put boards together that may be helpful to them,” Mr. Ferguson said. “Our industry is fairly gender starved ... the only way that changes is to put women on the boards ... the enlightenment has to start at the board level.”