ESG & Diversity
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Mary Oyerly
Senior Content Strategy Specialist

LGBTQ+ representation on boards: Lagging representation, limited data and opportunities to move forward

October 19, 2022
0 min read
woman reading about LGBTQ+ representation on boards

Following in the footsteps of gender, racial and ethnic diversity years before for public companies, LGBTQ+ board diversity has entered the conversation.

Yet is this a case of all talk and little action? According to research by Out Leadership for our 2022 Global Modern Leadership report, only 0.5% of Fortune 500 boards seats are held by self-identified members of the LGBTQ+ community.

Several factors contribute to this miniscule figure, from discrimination and stigma keeping many LGBTQ+ board members from disclosing their status to a lack of data collection in most regions in the world. In fact, Diligent’s 2022 Global Modern Leadership Report couldn’t even address this area of board diversity outside of the United States due to limited data. Furthermore, external regulations and internal company policies are just beginning to include LGBTQ+ among the factors for inclusiveness on boards.

Read on to learn more about the current state of LGBTQ+ data, disclosures and representation — and reasons for optimism in the road ahead.

Lagging Definitions, Limited Data

One obstacle standing in the way of data collection for LGBTQ+ board representation is recognition of LGBTQ+ status as a diversity characteristic that should be tracked in the first place.

  • Only 41 Fortune 1000 companies define board diversity as LGBTQ+-inclusive
  • 113 NASDAQ-listed companies define board diversity as LGBTQ+-inclusive
  • Only 30 NASDAQ-listed companies and 9 Fortune 1000 companies explicitly mention gender identity in addition to sexual orientation

Data from the U.S. companies who do disclose such figures indicates some promising trends. Members of the LGBTQ+ community held 26 Fortune 500 board seats in 2021. This is progress—it’s an increase from only four in the prior year. Furthermore, 9 of these LGBTQ+ board members were women, 4 were Black, and 2 were Latino(a).

On the flip side, several of these board seats were held by the same person, and these seats were only 26 of a total 5,670.

Reticence, Hesitance and Untapped Talent

A number of interconnected factors lead to a dearth of LGBTQ+ executives in candidate pipelines, disclosure reports, and the boards themselves.

Many individual board members hesitate to disclose their LGBTQ+ status. In the U.S., nearly half of LGBTQ workers (46%) reported receiving unfair treatment at some point in their careers, including being denied a job promotion or raise or being fired because of their sexual orientation or gender identity, according to a 2021 survey from the Williams Institute at the UCLA School of Law. 

Meanwhile, corporations and boards face obstacles of their own. One challenge is protecting personal privacy when it comes to disclosing LGBTQ+ status. Another is finding and recruiting LGBTQ+ board members in the first place.

The NACD (National Association of Corporate Directors) explained that some boards keep picking candidates with similar backgrounds simply because they feel comfortable with them. In addition, LGBTQ+ people have tended to stay clear of company circles where they don’t feel welcome. This points to a huge pool of LGBTQ+ talent that only exists “at the periphery of the board ecosystem,” where it remains untapped.

Action by Lawmakers, Financial Leaders and Board Members Themselves

As they did with gender, racial, and ethnic diversity, regulators and lawmakers are prioritizing LGBTQ+ inclusion on boards. In August 2021, the SEC approved a framework first introduced by Nasdaq: Publicly listed companies must include at least one woman on their boards as well as at least one individual who identifies as a racial minority or as LGBTQ. If they don’t, companies are required to explain in writing why not. Meanwhile in Congress, HR 1277, the Improving Corporate Governance Through Diversity Act, is being amended to include LGBTQ+ people.

Some of the world’s largest institutional investors are making their opinions known as well. BlackRock has stated that businesses should “aspire to reach 30% member diversity on their boards, with at least two directors who identify as female and at least one director who is a member of an underrepresented group.” And Goldman Sachs Group announced that it would no longer take on clients that don’t publicly disclose board diversity—and include sexual orientation and gender identity.

A June 2022 article in USA Today tells the story of Edison International board member Michael Camuñez:

“[He] was going over the proxy statement for a coming shareholder meeting in 2018 when he noticed that the utility holding company listed the race, ethnicity and gender of its directors, but not their sexual orientation or gender identity.”

“He floated the idea of adding that information to the annual regulatory filing. His fellow board members quickly agreed. Today, Camuñez, one of two Hispanic board members, is also identified as part of the lesbian, gay, bisexual, transgender and queer community.”

Good for Boards, Good for Business

At the same time, organizations have been developing resources to accelerate progress, from the recently launched NACD Accelerate program Out Leadership’s OutQUORUM initiative. The latter has built a database of over 1,500 board-ready LGBTQ+ candidates and published LGBTQ+-inclusive board diversity policy guidelines that have been adopted by 19 Fortune 500 companies.

Many corporations have been doing their part as well. Among Fortune 500 companies, 23 have LGBTQ+ inclusive board diversity policies — low but nearly twice the number from 2021.

“Some companies are incredibly forward-thinking and understand that this counts as an important point of view that they want to have in the boardroom,” Jana Rich of the Rich Talent Group said in an interview with USA Today.

Just as diverse perspectives are vital for strong decision-making, diversity as a whole—with leadership representing customers and employees—is good for business. Credit Suisse in its LGBT 350 analysis discovered that LGBTQ+-friendly companies performed better than companies that aren’t as inclusive.

In the words of openly gay tech entrepreneur George Arison: “The reality is that this is the next frontier of equalization.”

Download the 2022 Diligent Global Leadership Report.


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