Abstract

While gender differences in risk preferences and the benefits of gender diversity have been extensively documented, there is currently no research that combines the two concepts to measure managerial overconfidence in the context of REITs. In this paper, we study the impact of board gender diversity on the risk management decisions of 158 U.S. REITs over the 2004 to 2018 period. Gender diversity is measured using two distinct variables to independently reflect both the gender and the diversity dimensions, respectively expressed by the Blau diversity index and the number of female directors on the Board. Risk is proxied by four different measures, namely the portfolio’s green share as well as its level of geographical diversification, sectoral diversification, and net property trading. We find significant risk-reduction benefits associated with gender diversity, confirming that women are less overconfident than men, even in a managerial context. We contribute to the existing research by showing that the combination of both a female CEO and a sufficient number of female directors, whether in relative or absolute terms, is necessary to significantly influence corporate investment risk decisions.