Calif. Firms Respond to Call for More Women in Leadership
October 18, 2018
The commercial real estate industry has long been dominated by males, but some real estate firms hope to change that and name more women to their boards. Now, lawmakers are mandating this change.
California lawmakers have enacted a new state law that requires all public corporations to have at least one woman on their boards by the end of next year.
Overall, women nationwide comprise about 9 percent of the C-suite positions in the commercial real estate industry, according to Commercial Real Estate Women, a trade group.
“It’s a step in the right direction,” Wendy Mann, president of CREW, told the CoStar Group. “My hope is this step will demonstrate the value and opportunity that exists with diversity at the table and it will catch on as a positive opportunity with companies.” She says the mandate should not resort to hiring unqualified candidates, but rather encourage highly qualified women in the field to join the boards.
However, not all leaders agree that “gender-based quotas” are necessarily the best way to bring more diversity to the industry. Karin Chao, managing director at Infinity Realty Advisors, told the CoStar Group that she favors merit-based promotions.
The national real estate investment trust industry has been looking at expanding its gender diversity, too. More than half of the newly elected independent directors at REITs are women for the first time ever, according to Ferguson Partners, a professional services firm for the real estate industry, which analyzed 192 REIT boards’ compositions at their annual shareholder meetings. That is double the percentage of women newly elected to board seats two years prior.
The mandate by California—and especially its impact on publicly traded commercial real estate companies—will be closely watched nationwide.
“Hopefully, it will encourage honest self-evaluation and accountability in boards of directors across public companies,” Chao says. “There are certainly many directors that could be replaced with worthy candidates who can provide the boards of directors with a perspective that accurately represents the diversity amongst the company’s shareholders and customers. Social change takes time, and there are always many steps, and reiterations in the process. [This law] is just one step in the process.”
“California Real Estate Firms Prepare to Find Women for Boardrooms,” CoStar Group (Oct. 15, 2018)
Updated: April 23, 2019