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Why LGBTQ+ inclusivity matters for boards

by Jessica Tasman-Jones

This article is brought to you by FT Specialist’s Agenda, a publication that focuses on corporate boards.

Just over a year ago, Charlotte Hamilton, chief executive of Conamix, a US battery technology company, surprised her board when she informed them that she was no longer a man.

“It was and remains the hardest conversation I’ve ever had in business,” Hamilton, a transgender woman, told the OutQuorum summit in March.

In the US, 26 of the 5,670 board seats on Fortune 500 companies are held by people who are openly lesbian, gay, bisexual, transgender, queer and other sexual orientation and gender categories (LGBTQ+), according to OutLeadership’s Visibility Counts 2022 report. There is some progress: 3M, Blackrock, the New York Times and Utz Brands were among the corporations adding LGBTQ+ directors to their boards in 2021.

Data is limited when it comes to UK companies. A third of private companies included data on LGBTQ+ employees in their annual reports, while 2 per cent of FTSE 100 companies mentioned LGBTQ+ senior role models, according to a 2020 report from the Financial Reporting Council and the Good Side.

Although 68 per cent of leaders think they run a workplace that empowers LGBTQ+ staff, only 36 per cent of employees agree, according to a report from Accenture. Board directors that identify as LGBTQ+ can help bridge the gap by giving employees confidence that their employer takes inclusivity seriously.

The same report found just 31 per cent of employees are fully open about their sexual orientation or gender identity in the workplace.

“We have seen now some very high profile gay men reach board level and that's a really wonderful thing.” says Bobbi Pickard, diversity and inclusion consultant at BP and co-founder of Trans in the City, an education group. But Pickard says lesbians are not reaching UK boardrooms with the same success, something she says is partly due the dual discrimination they face from their sexual orientation and being women.

LGBTQ+ people in the UK are reeling from government proposals to exclude transgender people from a ban on conversion therapy, announced in April. Conversion therapy seeks to change someone’s sexual orientation or gender identity. A government-backed global LGBTQ+ equality conference, Safe to Be Me, was scheduled to take place this summer but has been cancelled following a boycott by more than 100 organisations.

The government has also lost Iain Anderson, Cicero Group chairman and its LGBT+ business champion, as a result. During his eight months in the role, he created the LGBT+ Business Forum and collected evidence on best practice in the workplace.

Business takes a more inclusive approach to LGBTQ+ issues than the government and is more aligned with society’s views, says Pickard. According to a poll by YouGov, 62 per cent of respondents believed conversion therapy to suppress someone’s gender identity should be banned, while 65 per cent believed it should be banned for sexual orientation.

“Business recognises trans and non binary people and values them just the same as they value every other diversity.” Doing so is in their interests for both attracting and retaining talent as well as productivity, Pickard says.

At board level, the Financial Conduct Authority, the UK regulator, introduced rules in April requiring companies to take a “comply or explain” approach to meet benchmarks on gender and racial diversity. But sexual orientation and gender identity will not be included in diversity targets.

Last year in the US, Nasdaq introduced a rule requiring all listed companies to have at least two diverse board members, a definition that includes people who identify as LGBTQ+. A year earlier, Goldman Sachs said it would require IPO clients to have at least one diverse board member, in a definition that included gender identity or sexual orientation.

Dow’s Jim Fitterling, one of five openly gay Fortune 500 bosses, came out to his board eight years ago when he was being considered for the chief operating officer role, before explaining his sexuality on a webcast with 53,000 employees.

“It was the best thing I ever did for myself,” he said at the OutQuorum summit. “I always say I should have done it sooner.”

When Conamix’s Hamilton was ready to come out to her board, she worked with Fitterling and Todd Sears, the founder of advocacy group Out Leadership, to come up with a script. In her remarks, Hamilton said she was the same leader the board knew before, but now that she could be a better leader by being open about her identity at work. She described being transgender as a medical condition and told the board chair she was not the gender she was assigned at birth and had been medically and personally transitioning.

“I feel I am the best CEO I’ve ever been,” she said. “I’m able to focus in a way I wasn’t able to before.”

In the UK, Pickard is hopeful the next generation of boardrooms will better represent society. “It's not a question of what we need to do to make organisations more diverse now, because it's too late for trans and non-binary people right now to reach boardrooms. But if those organisations want to be competitive, and innovative, or even here in 15 or 20 years, they need to start understanding it and getting it otherwise they're not going to attract the best talent.”

According to research by Ipsos, 24 per cent of those aged between 18 and 24 are not heterosexual. More than half say they are exclusively attracted to the opposite sex.

Pickard’s advice to the current crop of UK board directors is to find out more about LGBTQ+ issues. “The organisations that do the best are the ones where those at the top, the C-suite, get it and push down inclusion from the top and the grassroots get it and push inclusion from the bottom up.”

This article is based on a piece published by Agenda.

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