Abstract/Summary

The literature on gender diversity posits that women can benefit organisations through a monitoring perspective by alleviating agency issues or from a resource-based perspective by bringing in unique resources. This thesis builds on these theoretical perspectives and investigates the effects of women on the board on performance, risk, and risk-management strategies of US equity real estate investment trusts (REITs). In the first study, we find that an increase in board gender diversity increases firm performance but also increases firm risk, resulting in no risk-adjusted returns where women seem to fit the risk-return spectrum. Building on the literature where women are considered more risk-averse and less overconfident than men, we identify sources of this risk where women on board seem to make conservative investment decisions, concentrating properties by location and display a ‘home-bias’. Further evidence of this conservative investment approach is presented in the second study where women on the board lower a REITs transaction activity, especially for out-of-state transactions; favouring larger properties. Additionally, women on boards lower transaction activity in bull market states where overconfident investors increase activity and lower activity for non-traditional REITs which are considered risky. Although women on REIT boards increase overall risk, in the third study we find they lower tail-specific risk, especially for internally managed REITs where the board has more power to influence decisions. Given the superior monitoring of women, they eliminate the negative effects of risky concentration strategies which is not the case for REITs which do not have women on the board, where such strategies increase crash risk. Lastly, in this thesis we present evidence of over-monitoring, where exposure to highly religious states increases crash risk when internal monitoring mechanisms are already in place (i.e. women on the board) but lowers it for REITs which do not have these mechanisms in place.