CHICAGO, IL, May 3, 2012 – A national study of Real Estate Investment Trusts’ (REITs) Board structures by Ferguson Partners Ltd., a global executive recruitment consultancy, finds that firms that have had a female board member for more than three years have enjoyed materially higher returns than their counterparts without such gender diversity.
Conducted to identify characteristics that closely aligned with performance in the REIT sector, the study revealed that firms with at least one female on their board garnered higher annual Total Shareholder Return (TSR) growth rates than their peers without a female Board member. Specifically:
• 2.6 percent higher than peers over a three-year horizon;
• 3.6 percent higher than peers over a five-year horizon; and,
• 3.4 percent higher than peers over a ten-year horizon.
These striking results underscore the importance of diversity on boards and further illustrate that boards that are proactive in the pursuit of diverse perspectives are most apt to succeed,” said William J. Ferguson (top right photo), Chairman and Chief Executive Officer of Ferguson Partners Ltd.
Notably, of those REIT boards included in the study, 44 percent did not have a single female board member. This number is high, especially in contrast to Fortune 500 companies where nearly 11 percent of boards include at least one female director.
The 2012 study is based on the analysis of 164 REITs spanning multiple property types: multifamily, for sale residential, retail, hospitality, mortgage, office, senior living, industrial, and diversified.
The results are based on a cross data analysis of board membership and composition with firm performance and board tenures during performance horizons of three, five, and ten years. Ferguson Partners Ltd. based its analysis on performance growth data from 2000 to 2010.
The study analyzed several characteristics including board size, meeting frequency, compensation levels and structures, average board member and CEO tenure, percentage of independent directors, average director age and more.
Across all these variables, it was whether or not the board had any female members that rose above the rest as having a significantly greater effect on performance.
Contact:
Amy Smolensky
amysmolensky@comcast.net
312-485-0053
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