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Survey Shows Uptick in Female Participation on REIT Boards

Female Participation
August 2018

While the incremental shift in board composition is encouraging, there is still a long way to go to ensure true gender parity on most boards. “That’s complicated by the fact that there are still only a small percentage of women occupying C-suite positions that would provide the ‘ticket’ for board participation." More mentorship and sponsorship of women in real estate is needed to fix that issue.

However, the real estate industry needs to be looking beyond just gender parity. We should be talking about much broader diversity and inclusion at the executive levels of companies and their governance boards. That should be the focus of not just publicly held companies, but private organizations as well. —Alexandra Jackiw, CPM, President, Milhaus Management, NAA Past Chairman of the Board

The rental housing industry has given greater attention to the composition of corporate leadership, its inclusion of women and the level of diversity of its members found overall. FPL Associates-Ferguson Partners released a report in June that showed an increase in women leadership at these companies.

Its survey compares the board practices and director demographics of 192 REIT boards, with the board practices and director demographics of the companies included in the Russell 3000 Index as of December 2017.

The data corresponding to 2018 was reported by the companies in regulatory filings submitted to the Securities Exchange Commission during 2018. The data largely reflects board composition as of each company’s annual shareholder meeting in 2018, most of which occurred between April 1 and June 15.

  • Of the 94 newly elected, non-employee/outside REIT directors, just over one-half (52 percent) are female, representing a doubling from just two years earlier (26 percent in 2016). 2018 results mark the first time ever that new male directors comprised less than the majority across the REIT sector.
  • New female REIT directors elected in 2018 outpaced that of the broader public marketplace by over 50 percent as approximately 32 percent of all new directors in the Russell 3000 were female.
  • Of the newly elected female REIT directors, the most common backgrounds are in the consumer sector or investments; separately, FPL notes that approximately 61 percent have no prior Board experience.
  • In 2017, 21 percent of REIT boards exclusively had male directors, whereas now in 2018 that number has declined to just under 17 percent.
  • REITs continue to fare better than their Russell 3000 counterparts, as just over 18 percent of the latter continue to have no female directors on their Boards.
  • At the same time, it is worth noting that approximately 19 percent of Russell 3000 boards have three or more women, whereas approximately 14 percent of REITs can claim the same.
  • Boards continue to be mostly male (82.5 percent of REIT board members); however, the gap has narrowed in the industry by approximately 350 basis points between 2017 and 2018.
  • Separately, REIT boards are becoming slightly younger. In 2015, the average age of newly elected directors was 60, and that has since dropped to 58 in 2018. Compared to the Russell 3000, REIT directors tend to be slightly older.
  • Three REITS included four women directors, none of which were multifamily companies; and 28 REITs had three women, including Camden Property Trust, Equity Residential, Forest City Realty Trust and UDR.