Board of Director Monitoring and Firm Value in Reits

Posted: 10 Nov 1998

See all articles by H. Swint Friday

H. Swint Friday

Texas A&M University-Corpus Christi-College of Business; University of South Alabama

G. Stacy Sirmans

Florida State University - Department of Risk Management/Insurance, Real Estate and Business Law

Abstract

This article examines the influence of board of director composition and characteristics on real estate investment trust (REIT) shareholder wealth as measured by firm market-to-book ratios. Results show that increased outside director representation on the board leads to increased market-to-book ratios up to a point. However, as outside representation becomes too large, the market discounts REIT shares. In addition, a positive relationship is observed between REIT market-to-book ratios and the dollar values of director ownership, providing support for alignment benefits associated with increased director stock ownership.

JEL Classification: E31

Suggested Citation

Friday, H. Swint and Sirmans, G. Stacy, Board of Director Monitoring and Firm Value in Reits. Available at SSRN: https://ssrn.com/abstract=137845

H. Swint Friday (Contact Author)

Texas A&M University-Corpus Christi-College of Business ( email )

6300 Ocean Drive
Corpus Christi, TX 78412
United States
361-825-2498 (Phone)
361-825-5609 (Fax)

University of South Alabama ( email )

College of Business and Management Studies
Mobile, AL 36688
United States
334-460-6194 (Phone)
334-460-6734 (Fax)

G. Stacy Sirmans

Florida State University - Department of Risk Management/Insurance, Real Estate and Business Law ( email )

College of Business
Tallahassee, FL 32306
United States
850-644-8214 (Phone)
850-644-4077 (Fax)

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