Women have come a long way in this industry over the past decade or two. GlobeSt.com recently reported on a study by Ferguson Partners that found that REITs with at least one woman on their boards have seen significantly higher shareholder returns than those with no women—2.6% higher over a three-year period and 3.6% over five years.
That’s great news for women in this business. It also bodes well—relatively speaking—that 56% of the REITs have a female member of the board, whereas just 11% of Fortune 500 companies do. There were some advances broadly, though; in this year’s Fortune 500 ranking, 18 firms had female CEOs, up from 12 in 2011 and a mere seven a decade ago.
Still, that’s just 3.6% of the entire list. In the finance and insurance industries in particular, women make up 57.6% of the labor force, but only 18.4% of executive office positions, and only 3.7% of CEOs are female.
Nationally, women still earn less than men, and the gap’s been closing by a mere half a cent annually since the Equal Pay Act was passed in 1963. In fact, women would have to theoretically work 4.5 extra months per year to match men’s pay (incidentally, that’s why Equal Pay Day is held on April 5). For women of color, the gap widens even more.
There’s still a glass ceiling and commercial real estate is still considered a “boy’s club.” As many advances have been made, many women will tell you they need to work extra hard to prove themselves and be taken seriously in this industry.
We’re on a constant mission to portray more women on the pages of our magazine, but it’s been difficult. There are only so many senior-level women in this business, and they’re in high demand. Hopefully, as this generation of executives advances, more women will reach that bar.
This responsibility isn’t solely on women’s shoulders, however; real estate companies are increasingly making efforts to be more diverse, and in the most enlightened firms, that mission included the C-suite. Frankly, I believe any business that doesn’t include both genders in high-level positions and decision-making is doing itself a huge disservice. Having a balance of opinions is critical.
It also impacts the bottom line. According to the Spectrem Group, the number of wealthy women in the US is growing at a faster rate than that of men—68% over a two-year period vs. 36%. Catalyst found that Fortune 500 companies with more female executives had a 35% higher return on equity and a 34% higher total return to shareholders. It also found that Fortune 500 firms that had at least three women boards of directors saw an average return on equity increase of at least 53%, an average return on sales increase by at least 42% and an average return on invested capital increase by at least 66%. And the Ferguson study, which looked at 164 public REITs, examined several characteristics and found that board diversity was the only factor that correlated closely to performance.
Be it different approaches to business, motivations, our nurturing nature (businesses are a lot like children, no?)—whatever the reason—having more women on board, literally and figuratively, can only be a benefit.
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