Out Leadership examined the 2021 proxy statements for publicly listed companies to identify those that reported the sexual orientation and gender diversity of their Board members. We identified 30 companies that voluntarily disclosed this information. This represents considerable progress compared to the previous year highlighting the impact of OutQuorum, our LGBTQ+ board diversity initiative. There are approximately 6,000 companies traded on the NYSE and Nasdaq.
A reminder of the SEC rule on diversity disclosure
The SEC requires companies to disclose diversity but does not define what it means by “diversity”.
Out Leadership has been urging Chairman Gensler to change the SEC’s 2009 corporate board diversity rule (the “Rule”), which has proved inadequate in improving the abysmal representation of LGBTQ+ people on corporate boards.
The Rule requires public companies to disclose the extent to which they consider diversity when nominating and selecting board directors. However, the Rule does not define what the SEC means by “diversity” and it gives companies too much discretion on what they report. As a result, one can read strange statements in proxies such as “we have diverse members from Delaware and Rhode Island”.
At this point, only a handful of companies report the sexual orientation and gender identity of their Board members voluntarily. The Rule’s shortcomings have led to disclosures that are vague and of nominal use, particularly when it comes to LGBTQ+ diversity, despite demands from various stakeholders for broader and more robust reporting.
Several companies have taken matters into their own hands and disclosed the sexual orientation and gender identity of their Board members in 2021. We had a look at the annual report and proxy statement (schedule 14A) disclosures in 2021.
What is Schedule 14A?
SEC Form DEF 14A is a shareholder’s main document to understand the composition of the board of directors. “Also called a “definitive proxy statement,” Form DEF 14A is intended to furnish security holders with adequate information to be able to vote confidently at an upcoming shareholders’ meeting. The statement must be filed with the SEC by or on behalf of the firm soliciting shareholder votes.”
The 30 companies that reported on the sexual orientation and gender identity of their Board Members
[If you believe we are missing any companies from our list please reach out to firstname.lastname@example.org]
1. AECOM (page 3 – Sander van’t Noordende, new Board member, Fortune 500)
2. Anaplan (no LGBTQ+ Board member but reporting)
3. Anika Therapeutics (aggregated data, unclear)
4. Apple (aggregated data – Tim Cook, Fortune 500)
5. Aprea Therapeutics (aggregated data, unclear)
6. Axon Enterprise (page 10 – Caitlin Kalinowski)
7. Build-A-Bear Workshop (page 36, Board)
8. Citizens Business Bank (no LGBTQ+ Board member but reporting)
9. CMS Energy (page 2, Myrna Soto, Fortune 500)
10. Crowdstrike (aggregated data, unclear)
11. Cymabay Therapeutics (aggregated data, unclear)
12. DHX (page 9 – Brian “skip” Schipper)
13. DiamondRock Hospitality (aggregated data, unclear)
14. Edison International (page 7, Camunez, Fortune 500)
15. Equisolve (page 14)
16. Exelon (no LGBTQ+ Board member but reporting, Fortune 500)
17. Facebook (aggregated data, unclear, Fortune 500)
18. Federal Deposit Insurance Corporation (Barney Frank)
19. Fintel (unclear)
20. FLIR (not named, 2020 proxy)
21. M&T Bank (page 27, Board)
22. Mersana (page 8, Board)
23. Mesa Laboratories (Page 8, Board)
24. Nvidia corporation (no LGBTQ+ Board member but reporting)
25. Papa John’s (Page 6, Board)
26. Prudential (page 10 – not named, Fortune 500)
27. Qumu Corp (page 15 – not named)
28. Ultragenix (page 5, Matt Fust)
29. Upwork (page 32, not named)
Why it matters?
Many corporate secretaries have told us that they are hesitant to collect and disclose data on sexual orientation and gender identity in the past year. They also mentioned they do not believe Board members would disclose their sexual orientation and gender identity. The companies that disclosed sexual orientation and gender identity have proven that it is feasible and that Directors are willing to self-disclose.
How Out Leadership can help?
Out Leadership has developed guidelines on how best to collect and disclose sexual orientation and gender identity (Download Visibility Counts: The LGBTQ+ Board Leadership Opportunity research report here). Out Leadership is also lobbying the regulator to require such disclosures: through HR 1187 (pending Senate approval) in the US or the FCA proposal CP21/24 in the UK. Consider reaching out to your Senator and the FCA (consultation closes 20/10/2021) to support LGBTQ+ inclusion in the Boardroom.