Board of Director Monitoring and Firm Value in Reits
Posted: 10 Nov 1998
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: Suggested Citation