Succession planning and board refreshment will be essential for many organizations in the coming decade, especially to bring in a new generation. For example, half of real estate investment trust (REIT) board members are over 65, highlighting the need for fresh perspectives to address political, social, economic, and regulatory challenges. As industries assess emerging technologies’ effects, boards must create structures for education, monitoring, risk prevention, and regulatory compliance. This shift calls for skilled talent that’s prepared to navigate evolving complexities and shape future governance effectively.
DHR’s Real Estate and Board & CEO consultants connected with real estate industry experts who are members of corporate boards to get their insight on current boardroom trends, their contributions to organization success, and essential advice for emerging leaders who aim to join boards.
Cathy Marcus, Co-Chief Executive Officer & Global Chief Operating Officer, PGIM Real Estate; Liz Tennican, Managing Partner and the Head of Investor Relations, Carmel Partners; and Stephen Quazzo, Co-Founder and Chief Executive Officer, Pearlmark, shared the following key insights to help seasoned leaders navigate the boardroom.
Real Estate’s Strategic Role in Governance
Corporate boards across sectors increasingly turn to directors with commercial real estate experience. Real estate expertise supports strategic decisions regarding physical spaces – whether offices, warehouses, industrial plants, healthcare facilities, or retail locations – helping to optimize asset management, site selection, and sustainability efforts. Such expertise in the boardroom aligns the company’s real estate strategy with its overall business strategy and ensures that real estate decisions support broader corporate goals of brand image, talent acquisition, and financial performance. This input can strengthen corporate governance, reduce risk, manage cost, and fuel growth, which ultimately enhances shareholder value.
Board Diversity Brings Challenges and Opportunities
While corporate boards are making strides in building boardroom diversity, there’s still work to be done. Increased representation of women and underrepresented groups, along with varied skills in finance; technology; cybersecurity; environmental, social, and governance (ESG) strategy; and marketing, leads to a collection of comprehensive board perspectives. Driving diversity into the boardroom has proven to positively impact an organization’s capacity to better serve a broad base of customers and employees, successfully tackle complex issues, and foster innovation, resulting in overall improved business outcomes.
Technology Improves Decision-Making
Artificial Intelligence (AI) and data analytics are shaping real estate management. Successful boards ensure their organizations use digital tools and technology to enhance decision-making, risk management, and operational efficiency. Today, advancing sustainability is paramount to future success with innovations in construction materials and building methods. The board must address energy management strategies and, as data centers expand, ensure that sustainable development practices are integrated into the decision-making processes.
Balancing Oversight with Workforce Engagement
Board members’ engagement with the workforce provides insight into company culture, operational challenges, and employee perspectives. Visiting worksites and facilities builds connections with employees and deepens understanding. A balanced approach, known as “noses in, fingers out,” focuses board members on strategic oversight while leaving daily operations to management, ensuring effective governance and respecting boundaries.
Staying Informed Through Networking and Learning
Ongoing education and networking ensure board members remain current with industry trends, regulations, and best practices. Attending industry events, connecting in professional networks, and participating in forums are crucial for informed governance and risk management. By staying engaged, board members strengthen their contributions to the organization.
Anticipating Future Boardroom Trends
In the years ahead, ESG priorities, technological advancements, and agile governing leadership will continue to reshape corporate boards and governance practices. Boards that adapt to these changes proactively will support sustainable growth and innovation and will drive organizational success.
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