This document examines how the composition of board of directors impacts real estate investment trust (REIT) shareholder wealth as measured by the firm's market-to-book ratio. It finds that internal monitoring by directors can help create shareholder wealth in REITs. Outside directors in particular serve to enhance shareholder value. The study determines that characteristics like the categories of directors (inside, affiliated, outside) affect a REIT's market-to-book ratio, which is a measure used to compare company performance.

1. BOARD OF DIRECTORS MONITORING AND FIRM
VALUE IN REITS
Issue: Examine the influence of board of director
composition and characteristic on real estate
investment trust (REIT) shareholder wealth as
measure by firm market –to-book ratio.

2. Findings:
 How to use market-to-book ratio and its important toward
the firm.
 The categories and roles of directors to the firm.
 The types in REIT
 Two groups according to their relative market-to-book
ratio.

3.  market-to-book ratio =
book value of the firm / market value of the firm
 The uses of market-to-book ratio:
- measuring company’s performance and making
quick comparisons with competitors.
 The categories of the director to the firm are
inside, affiliated, and outside directors.
 REIT’s are classified as either equity, hybrid or
mortgage
 The first group consists of REIT’s with high
relative market-to-book ratio, while the second
group contained REIT’s with low market-to-book
ratio

4.  Equity REIT is tend to specialize in owning certain
building types such as apartments, regional malls,
office buildings or lodging facilities. Their revenues
come principally from their properties' rents.
 Mortgage REIT deal in investment and ownership
of property mortgages. Fewer than 10% of REITs
are mortgage REITs; these REITs make loans
secured by real estate, but they do not generally
own or operate real estate.

5.  In a conclusion, (Mcintosh, Rogers, Sirmans and
Liang, 1994) suggest that internal monitoring by
directors can act to create shareholders wealth in
REIT and supports the widely held believe that
outside directors serve to enhance shareholders
value. This determines the impact of REIT board of
directors composition and characteristics on REIT
value as measured by a firm’s market-to-book ratio.