The impact of board diversity on REIT performance and corporate governance

We examine the relation between board diversity and REIT performance and risk for the period 2010-2020. Despite considerable research on REIT boards, corporate governance, and performance, studies examining the impact of diverse boards are sparse. Yet industry data shows that REIT boards are becoming increasingly more diverse. We merge REIT financial data from Compustat with director characteristics data from Boardex to examine how board diversity impact firm performance. Specifically, we examine the relationship between board diversity and a) firm financial outcomes such as FFO per share and ROA, and b) firm risk from market or portfolio sources. Our initial analyses show that both board diversity and the network size of women positively impacts REIT performance, as measured by FFO, is positively related to having women on the board and with the network size of the women. Thus, REITs benefit from adding well connected females to their boards. While the impact on leverage from board diversity is mixed in the literature, our initial results do not show that gender impacts firm risk, as measured by debt to assets.