LGBTQ+ Excellence in the Boardroom – A Conversation on Integration and Leadership

Directors joined us for a virtual discussion on LGBTQ+ Excellence in the Boardroom. Our panel included Fabrice Houdart, executive director at the Association of LGBTQ+ Corporate Directors; Jim McCoy, CEO of Atlas; Vanessa Ruda, senior partner and central region leader at RHR International; and Beth Sasfai, partner at Cooley. Find the recording and key takeaways from their discussion below. 

View The Recording

KEY TAKEAWAYS

Legal and Regulatory Landscape on Board Diversity:

• Nasdaq Rule Rollback & Goldman Sachs Diversity Policy: NASDAQ removed listing rules requiring detailed board diversity disclosures, including race and LGBTQ+ representation, after a 9-8 vote at the Fifth Circuit holding that the SEC didn’t have the authority to approve the rule. Similarly, Goldman Sachs ended its four-year diversity policy requiring at least two diverse directors (including one woman) in order to take a company public.
• Proxy Advisors’ Stance: ISS will no longer factor board diversity considerations into voting recommendations for US companies, while Glass Lewis held the line on board diversity but will flag negative recommendations on diversity matters and provide a justification for alternative votes.
• Broader landscape: Recently issued presidential executive orders, publicly announced government investigations into companies like Comcast and Verizon, and state attorney general lawsuits and investigations highlight the growing legal risks surrounding diversity and inclusion efforts at both the workforce and board levels.
• Shifting Landscape: With these regulatory changes, boards must remain agile and informed, adapting to new rules to mitigate potential risks associated with non-compliance.

Navigating Difficult Conversations and Board Culture:

• Creating a Safe, Inclusive Environment: Boards should focus on fostering an environment where employees feel safe to express themselves, which helps attract top talent and maintain a healthy company culture. Even when diversity is a contentious issue, emphasizing human capital management as part of good governance and good management can facilitate effective conversations on this topic.
• Aligning Risk, Values, and Stakeholder Expectations: Encourage open discussions on inclusion during board meetings, focusing on the company’s risk appetite and aligning messaging with company values. Management should also engage in transparent conversations about its commitment to creating an inclusive workplace.

LGBTQ+ Directors in the Boardroom:

• Balancing Identity and Professional Value: LGBTQ+ directors should be empowered to express their authentic selves while focusing on their professional value proposition, leading with skills and achievements. Their unique perspectives, informed by their identity, can bring added strength to the business.

Board Composition, Communication, and Risk:

• Reassessing Board Messaging: As the regulatory landscape changes, companies should carefully reconsider how they present their board composition, especially in proxy statements. Consider whether to continue providing individualized director diversity data in the proxy statement (similar to what was in the Nasdaq table) or whether aggregate board diversity disclosure is sufficient to satisfy the needs of various stakeholders. Ensure messaging reflects company values and stakeholder expectations, focusing on meritocracy and inclusivity, never quotas.
• Evaluating Risk Profiles and Transparency: Companies should adjust their inclusion communications based on their risk profile—assessing their current initiatives and statements to make sure they are lawful and accurately described—while remaining transparent about their values. Being mindful of the shifting legal landscape is critical.

Building Allyship and Navigating Tough Conversations:

• Fostering Solidarity and Courage in Conversations: Board members should encourage allyship among diverse groups within the boardroom. When addressing difficult inclusion topics, focus on facts and the company’s best interests, leading with compassion and courage. Thoughtful communication helps build long-term respect and trust.
• Inclusive Networking and Relationship-Building: Create inclusive networking opportunities by encouraging shared interests (e.g., music, travel, food) and avoiding exclusive environments based on gender or other personal preferences.

Mental Health Considerations for LGBTQ+ Professionals:

• Protecting Mental Well-Being: Directors should prioritize their mental health by avoiding basing self-worth on external judgments or online commentary. Focus on aligning with personal values and well-being.
• Creating Safe, Authentic Spaces: It’s crucial to promote environments where LGBTQ+ professionals can be their authentic selves without fear of discrimination or marginalization. Directors should advocate for these inclusive spaces at the board level, ensuring everyone feels safe and valued.

Thank you to our partners for making this event possible: