“When it comes to investing, the research is clear: diverse groups make better decisions. That’s why for many years, the New York City Pension Funds have been leaders in advocating for increased representation of women and people of color, and of diverse skills and experience, in the all-too-often homogenous board rooms of corporate America. Last week, a new milestone was reached, as the City’s Funds became one of the first major U.S. institutional investors to approve an LGBT-inclusive director standard for the companies in which they invest billions of dollars.
This announcement is the latest step that pension funds have taken to encourage greater diversity throughout their portfolio of companies, from the board room to the workplace and throughout the supply chain. But the ability to spur real change will require similar steps from other investors and from companies themselves.
Too many U.S. companies overlook valuable potential in the LGBT community when selecting corporate directors. Investors pay a price for this lack of inclusion, because placing LGBT people at the most senior levels of leadership can markedly boost bottom lines. Data compiled by Credit Suisse show that investment returns are 10 percent higher at LGBT-friendly companies – Out Leadership aptly call this the ‘Return on Equality.’”