Today, the New York City Comptroller’s office adopted new Corporate Governance Principles and Proxy Voting Guidelines by the New York City Pension Funds that expand the definition of board diversity beyond race and gender to include LGBT directors.
The New York City Pension Funds have more than $153.8 billion under management; they were among the first institutional investors to adopt formal proxy voting policies. This is the first major overhaul of the proxy voting policies’ format and public disclosure since they were initially adopted.
“We commend Comptroller Scott Stringer and the Comptroller’s office for their leadership on this vital issue,” said Out Leadership Founder Todd Sears. “Our research shows that less than 1% of current directors on Fortune 500 boards are openly LGBT. Only a handful of Fortune 500 firms include sexual orientation and gender identity in their board’s definition of diversity. The time has come for action like the Comptroller’s.”
Out Leadership’s initiative Quorum, which seeks to increase the representation of LGBT people on corporate boards, worked with the Comptroller’s office while they developed the new policies. Board diversity enhances corporate performance, mitigates risk, and creates market opportunities.
“Companies make their most important decisions in the boardroom, including decisions about strategy, financial matters, and employment policies and practices that reach into every corner of our economy,” said Quorum Leadership Committee member Mario Palumbo, Partner at Millennium Partners. “Research has shown that more diverse boards lead to better decision-making.”
Quorum, founded in 2014, has an established track record of raising the visibility of the disproportionate representation of LGBT people on corporate boards. In addition to Comptroller Stringer, Quorum has engaged elected officials with oversight into investment strategy including California State Controller Betty Yee and California State Insurance Commissioner Dave Jones. As a result of Quorum’s work, companies like Simmons & Simmons have committed to including LGBT inclusion in their board diversity statements.
Quorum’s Ambassadors – business and government leaders who have committed to advocate for increased representation of LGBT directors on corporate boards – include Commissioner Stringer, Controller Yee, New York State Comptroller Thomas DiNapoli, and Bloomberg LP Chairman Peter Grauer.
Increased awareness of the importance of LGBT inclusion on corporate boards within the business community has paid dividends. In 2015, at least two openly LGBT people were named to private corporate boards: Chad Leat (Norwegian Cruise Lines), and Dr. Ashley Steel (National Express Group PLC.) And in 2015, Stanford University added LGBT content to its board governance boot camp programs.
While Quorum’s key objective is to raise awareness of the importance of increasing LGBT representation on corporate boards, and help companies tap into the LGBT market, valued at over $4 trillion worldwide, the initiative has also identified a global cohort of senior executives who have the experience that boards seek, including C-suite responsibilities, P&L management, and financial and audit background – and who also happen to be openly LGBT. Quorum’s cohort of potential board candidates receive additional training opportunities from McKinsey and KPMG.
KPMG is Quorum’s Founding Sponsor, and will host its inaugural Director’s Summit in the fall of 2016. The Quorum Director’s Summit will convene select Ally and LGBT corporate board members, representatives from Out Leadership member companies, and top Quorum candidates.
Quorum, the first and only initiative of its kind working in the LGBT board diversity space, is particularly focused on the intersectional diversity of our community, including women, people of color and veterans.