LONDON--(BUSINESS WIRE)--Ferguson Partners, Ltd., a global professional services firm specializing in executive and director recruitment, leadership consulting, compensation consulting, and organizational, financial & strategic consulting, released today critical research which examines data collected from 40 top performing US REITs and the 30 top performing UK REITs to find out how the REIT industry is measuring up regarding female representation in the Boardroom. This research is critical to the industry as it supports a multi-decade trend towards female representation in the Boardroom globally and across industries.
The research showed that when the top UK and US REITs Board of Directors were compared to S&P 500 Index and FTSE 100 companies’ Boards, REITs are significantly lagging behind and underrepresenting women on their Boards. This is significant as the research supports that the more gender-diverse a Board of Directors is the better they operate, make more effective decisions and have a higher chance of reaching their business goals.
Highlights from the research:
80% of the US REIT Boards have at least one female director, whereas
73% of UK REITs have a female director. Compared to:
- Of the S&P 500 companies, 97% have at least one female director and 75% have at least two female directors on the Board.
- 100% percent of FTSE 100 companies have at least one female Board member and 55% of the companies have greater than 25% of their Board comprised of female.
“This research is important to the REIT industry as it helps executive management and Boards better understand the critical need for a gender-diverse Board of Directors,” said Serena Althaus, Senior Managing Director, Ferguson Partners. “Our hypotheses of why there is a shortage of women on REIT Boards is due to the paucity of senior women in the industry. Our sector needs to proactively promote the diversification agenda which has proven commercial benefits to businesses.”
Ferguson Partners, which has 25 years of experience consulting leading REITs globally on Board and governance issues, recommends the following strategies for improving female Board representation in the REIT industry:
- Executive Focus: If a company is going to encourage diversity, it has to start at the Board level and drive it through senior management. If a company’s customer base and employee population are diverse, it is counterintuitive not to have diversity on the Board. Since male representation on boards significantly outnumbers female membership, it should be noted that men will need to take an active focus in increasing Board gender diversity.
- Expand Search Criteria: Previous Board or Chief Executive Officer experience is a common criterion for a Board search, making it difficult for women to find their first Board assignment. Since there is an insufficient pool of experienced female Board members in the industry, if companies want to achieve gender diversity, they will need to adapt their Board qualifications.
- Look Beyond the Real Estate Industry: Real estate is a broad industry, which touches many adjacent fields. Many REITs can benefit from gaining the perspective of individuals in related fields such as consumer goods/services and technology.
- Focus on Candidate Quality, Not Quotas: Aggressively hiring unqualified women into Board roles in the name of diversity can have a negative impact on performance and limit future diversity hires. If the first female Board member is well qualified and a good fit with the Board, this better enables increasing gender diversity in the future.
Although the REIT industry needs to accelerate and pursue more female representation on their Boards, as it will better prepare them for optimal success, this goal is achievable if REITs adopt the strategies outlined above and take note of the progress made by S&P 500 and FTSE 100 companies.
About FPL Advisory Group:
FPL Advisory Group is a global professional services firm specializing in executive and director recruitment, leadership consulting, compensation consulting, and organizational, financial & strategic consulting. For more than 25 years, FPL’s consultants have acted as trusted advisors to senior leaders at companies throughout the real estate and financial services industries. www.fpladvisorygroup.com