How Gender Diversity Shapes Cities: Evidence from Risk Management Decisions in REITs

In this paper, we study the impact of CEO and board gender diversity on the risk management decisions of 179 U.S. Real Estate Investment Trusts (REITs) during the 2001-2018 period. Using a bottom-up analysis on the properties in REIT portfolios, we find significant risk reduction associated with gender-diverse REIT leadership. We document that REITs with a woman CEO, in combination with more women on the board, display less active trading and a longer hold period for assets. In addition, REITs with more gender-diverse leadership are more geographically focused, which for REITs is considered a lower risk investment strategy. Finally, REITs with more gender-diverse leadership are more actively investing in environmentally sustainable real estate. We conclude that gender diversity in real estate firms carries real-life implications for U.S. cities, given their key role as developers, owners, and operators of the built world.

Automated summary

This paper examines the impact of CEO and board gender diversity on the risk management decisions of 179 US Real Estate Investment Trusts (REITs) during the period of 2001-2018. The findings suggest that gender-diverse REIT leadership leads to significant risk reduction, with woman CEOs and more women on the board associated with less active trading and longer hold periods for assets. Furthermore, REITs with more gender-diverse leadership tend to have a more focused geographical investment strategy and actively invest in environmentally sustainable real estate.