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REITs board gender diversity: the spillover effect of the Big Three campaign

Author

Listed:
  • Douglas Cumming

    (Florida Atlantic University)

  • Xiaohu Guo

    (College of Charleston)

  • Lukai Yang

    (Texas A&M International University)

Abstract

The Big Three Institutional investors (State Street, Blackrock, and Vanguard) launched a board gender diversity campaign in 2017. Gormley et al. (J Financ Econ 149(2):323–348, 2023) find that the campaign urged a meaningful change in board gender diversity and upgraded women’s roles on boards. In this paper, we assess whether the gender diversity campaign has spilled over to REITs, an industry with fewer Big Three holdings, and how enhanced board gender diversity in turn impacts firm performance. We find that REIT firms improved board gender diversity more proactively than others after 2016. They also promoted more females to key committee positions, indicating that firms’ responses went beyond tokenism. Improved board gender diversity led to positive changes in firm performance as measured by the percentage change in ROA and stock returns. Our findings shed light on the recent debate about the effectiveness of shareholder advocacy and imply that the impact of the Big Three investors can go beyond portfolio companies.

Suggested Citation

  • Douglas Cumming & Xiaohu Guo & Lukai Yang, 2024. "REITs board gender diversity: the spillover effect of the Big Three campaign," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 48(3), pages 889-923, September.
    • Handle: RePEc:spr:jecfin:v:48:y:2024:i:3:d:10.1007_s12197-024-09681-y
    DOI: 10.1007/s12197-024-09681-y
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    More about this item

    Keywords

    REIT; The Big Three campaign; Board gender diversity; Spillover effect;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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