Are the odds of gender equality on REIT boards really 50/50?

As a father of two young children- a savvy young girl and a charismatic baby boy - I’d like to believe the world they are growing into will treat them fairly and that they will both have access to the same opportunities regardless of gender. However, I am aware that without conscious male leaders, they will see a reality where the odds of gender equality is not 50/50.

Today in the world of real estate investing, it’s clear that women don’t have equal access to the same opportunities as men. In fact, most top real estate executives and board members are men. This is true in Mexico, in the US, and globally (I wish it wasn’t). There is a push by leading US corporations and investors (e.g., Blackrock, State Street, among others) to improve gender diversity in the boardroom and thus far there has been huge progress. Case in point, there are 2x more women on US REIT boards compared to 8 years ago. While this is great news for the US REIT market, I was curious what the situation was in an emerging REIT market.

So I looked at the public real estate market in Mexico, which has been around for over a decade. Currently there are over sixteen public real estate companies that in total have ~140 board members. Unfortunately, there are only ~19 women board members. While there is on average at least one woman board member per company, the figures highlight there is still much more progress required to improve the board composition of public real estate companies in Mexico.

Below are some interesting statistics that further support the point:

1. Only 13% of board members are women while 87% are men.

2. There are three companies with no women board members.

3. There are three companies with at least two women board members. It’s not surprising that two of these companies have better overall corporate governance and/or have delivered higher total returns for investors.

There may be a variety of reasons (in many cases excuses) to explain why there are few women on these boards. However, there is no denying that several of these companies should consider a board refresh at their next shareholder meeting. Company founders and C-Suite executives (many who are men) have to consciously advocate for women candidates for open board positions since the data highlights there may be network biases or social barriers driving board inequality.

There has been a greater focus on ESG amongst real estate companies in Mexico. This has resulted in companies improving governance structures (e.g., internalized management), issuing green bonds (e.g., Fibra Prologis’ $370M green private placement) and most recently the potential launch of an ESG-focused REIT. I am hopeful that this ESG momentum will also result in more women board members. I’d like to believe that five decades from now, my daughter will have an equal opportunity to fill a corporate board seat as her male peers.

Be Brava! And improve board diversity!

David De La Rosa