Steve Sterrett, lead trustee at Equity Residential (NYSE: EQR), participated in a video interview in conjunction with Nareit’s REITwise: 2023 Law, Accounting & Finance Conference held March 21-23 in Phoenix, Arizona.
Sterrett said the best advice he can give to REIT professionals in a financial role today it to “go back and learn from history,” but that ultimately, it’s most important to understand your company’s risks.
“Risks are asymmetric, and you don’t want to take an undue amount of risk for just a minimal amount of benefit,” he said.
Sterrett said being a board member is a “real art” that he didn’t have an appreciation for when he was the CFO of Simon Property Group (NYSE: SPG) for 20 years, but that today he looks at it in a “whole different way.”
“A director doesn’t have that level of knowledge and understanding [that management has about the company], but what they do have is all of these life experiences and the ability to relate something that they saw in their career or in their industry that could be of immense value to you and yours,” he said.
Sterrett added that following the Sarbanes-Oxley Act of 2002, management teams are more in tune with what’s in their company’s financials and that the audit process has been “de-risked” as a result.