While many leading U.S. REITs remain under the control of a founder or founding family, a growing number of these publicly traded firms are passing the reigns to a professional manager outside the family. This significant move, as well as the increasing appointment of second-generation family CEOs ready to embrace change, poses a number of governance challenges, as outlined in a new report from Moody's Investors Service.

A major challenge: accelerating necessary changes in board membership. Despite changes in REIT management in recent years, the report notes that there have been only limited adjustments to the composition of boards. The report suggests that REITs need to bring on new board members with fresh perspectives, more varied skills, and greater independence.

“Many boards would be strengthened by becoming more diverse and having more people with large public company experience and who have experience in [different types of] operations,” says John Kriz, Moody's managing director of real estate finance. “They can provide a new take on life that we see as potentially valuable for property companies.”