During my trip to San Francisco this week for OutNext, I had a fascinating breakfast with Matt Fust to discuss strategies for increasing LGBT+ participation on corporate boards of directors. Matt serves as a Senior Advisor to Out Leadership’s QUORUM program, an initiative sponsored by KPMG since 2016, which advocates for LGBT+ diversity in corporate governance [read: Out Leadership’s LGBT+ Board Diversity Guidelines].
Since 2015, QUORUM has delivered research making the business case for board diversity, convened board leadership dinners and board fit workshops for aspiring LGBT+ board members. Matt, himself an openly gay Board member in four biotech/life sciences companies, helped Out Leadership compile lists of LGBT+ people who have the required qualifications, experience and reputation to sit on these Boards – basically “binders full of aspiring LGBT board members” to paraphrase Mitt Romney. As a next step, he is working to build a coalition of companies to expand Out Leadership’s board diversity guidelines.
During our conversation in San Francisco, we discussed:
LGBT+ representation matters whether it is in political life [interesting read: Andrew Reynolds’ The Children of Harvey Milk: How LGBTQ Politicians Changed the World], in the media, international institutions or business. Corporate boards take actions and make decisions that not only affect the lives of millions of employees, consumers and investors, but also end up shaping the lives of LGBT+ people.
While traveling recently, I have been reading “A Brief History of Humankind” by Yuval Noah Harari and was struck by this sentence “Every point in history is a crossroads.”
Decisions taken in the boardrooms of Facebook, Apple, 23andme or Amazon are shaping our lives for centuries to come. LGBT+ people have a stake in these decisions and yet have almost no voice in them. As Matt reminded me in San Francisco, the old adage, “If you are not at the table, then you could be on the menu” applies here too.
Companies, particularly in the US and UK, have recognized the importance of recruiting and retaining LGBT+ people to improve business or organizational performance and better meet the needs of a diverse customer base. This understanding of the value of LGBT+ inclusion is illustrated by the growing number of Out Leadership member companies (last week we welcomed MSCI as our 76th member) which are investing in empowering their LGBT+ talent. Beyond staffing, academic researchers and others have also highlighted the importance of diversity among board directors to increase the range of perspectives for decision making, among other benefits.
QUORUM, however, found challenges to increasing LGBT+ diversity on boards and underscored the importance of identifying strategies that can improve or accelerate efforts to increase the representation of minorities on boards. In 2016, Out Leadership’s Founder & CEO, Todd Sears revealed that there were fewer than 10 openly LGBT+ directors on the boards of Fortune 500 companies, and only two Fortune 500 boards included sexual orientation and gender identity in their definition of board diversity. The reasons are obvious: the majority leverage their full control over boards and benefit one another by building “I’ll scratch your back if you scratch mine” relationships. Introducing diversity means sharing power which is never easy.
“Power concedes nothing without a demand. It never did and it never will.”
― Frederick Douglass
OutLeadership is currently focusing on the nomination/governance agenda for upcoming May-June board meetings. We are asking for an amendment to companies’ corporate governance guidelines that includes sexual orientation in the list of demographic factors considered important for assembling a diverse board.
The time has come for LGBT+ people to get fair representation in decision-making bodies including in the corporate world. Corporate boards are already drawing from previously underrepresented populations in terms of gender and race simply because that is where boards find the talent and expertise they need. In fact, Goldman Sachs CEO David Solomon announced last month that the investment bank wouldn’t take companies public unless the company had at least one “diverse” board member. The pressure on corporate boards to include sexual orientation and gender identity in their metrics is not going away. Out Leadership will continue to drive this overdue agenda.