Just .9% of board seats at Fortune 500 companies are held by LGBTQ+ leaders. Here’s why

Most recent estimates suggest that 7.6% of U.S. adults identify as members of the LGBTQ+ community. However, very few members of this community have ascended to the highest levels of business: the boardroom.

Last month, the Association of LGBTQ+ Corporate Directors released their Board Monitor Report, which outlines the underrepresentation of LGBTQ+ people in the boardrooms of Fortune 500 and NASDAQ companies.

The nonprofit’s report reveals that only 1.3% of board seats are occupied by openly LGBTQ+ people at Nasdaq listed companies. Similarly, only 0.9% of Fortune 500 seats are held by LGBTQ+ individuals. Furthermore, only one-in-ten Fortune 500 and Nasdaq listed companies have an LGBTQ+ board director.

The report suggests that “bottlenecks in the selection and nomination process, including a ‘network gap’ signaling potential unconscious bias against admitting LGBTQ+ talent into certain key access pipelines and platforms” could be to blame.

The Association of LGBTQ+ Corporate Directors, created in 2022, was founded to facilitate an access point between LGBTQ+ people looking to hold board positions and boards looking to expand inclusively. Here’s why they believe LGBTQ+ corporate leadership is so far behind.

Why is there a lack of LGBTQ+ representation in the boardroom?

According to Fabrice Houdart, founder and executive director of the Association of LGBTQ+ Corporate Directors, one reason for the LGBTQ+ board leadership gap is that board diversity has just recently become a point of interest. Part of the lack of representation comes from the lack of attention, he says.

Getting a seat on a corporate board can be difficult because it is often a secretive and discretionary selection process. Potential candidates have to be nominated by existing board members or investors and then elected, which requires significant networking. Being a part of a minority group of any kind can make getting invited into these networking spaces much more difficult.

Another cause for the LGBTQ+ corporate leadership gap is the lingering impact of the AIDs epidemic on the LGBTQ+ community. “A lot of the people that should be at the top of business today…are [people] between 55 and 75 and unfortunately, have died of AIDS,” explains Houdart.

The impact of the Nasdaq’s board diversity rule

In 2021, the SEC approved The Nasdaq Board Diversity Rule. The rule was updated in 2023 and requires all companies listed on Nasdaq’s U.S. exchange to annually publish board-level diversity statistics using a standardized template, and provide an explanation if their diversity is absent.

Since the new rule went into place, diversity on corporate boards has increased—and so has the volume of available data on the subject.

“We feel that the NASDAQ disclosure rule has been very positive,” says Houdart. “Shareholders finally have information about who is sitting on their board.”

As a result of this newly available data, more organizations have taken steps to increase the diversity of their boards, which many say has positive business outcomes. According to the Corporate Governance Institute diverse boards “make better decisions and result in better outcomes and profits.”

Why is it important to have LGBTQ+ representation in boardrooms?

Still, Houdart says that people often question why sexuality plays a role in how successful a board member is. He explains that LGBTQ+ individuals have a different outlook on life that can be valuable to decision makers.

“With a more diverse board, the board has more questions, has a broader perspective and more insights, to ask a broader set of questions, which is the board’s responsibility,” says Rob Smith, who is a board member of the Association of LGBTQ+ Corporate Directors’ board. “I also think it is extremely important for employees to see themselves reflected in the board.”

Indeed, having a more diverse board can also positively impact an organization’s workforce. For instance, Cathay Halligan, an Independent Board Director for public company boards, ULTA, Ferguson, JELD-WEN and Driven Brands as well as one private company board, Anticimex, says that her presence has led to an increase in consideration of company-wide diversity initiatives.

“On one of my boards, the chair of the board called me and said, how should we think about a broader company policy diversity?” she says. “He wouldn’t have made that call unless he had a sense that I had a perspective about diversity.”

Diversity within the LGBTQ+ community

It is also important to keep in mind that LGBTQ+ leaders are themselves part of an extremely diverse community. And while several white gay men have managed to climb to the upper echelons of corporate America, there is still significant progress to be made in the advancement of LGBTQ+ leaders who are people of color, women, nonbinary and/or transgender.

“There’s an assumption that one LGBTQ person can represent the entire LGBTQ community, which is a lot, because, you know, a white gay man may not be necessarily the right person to represent or speak on behalf of the . . . Black trans female community,” says Smith.

Of note, among LGBTQ+ board members of Fortune 500 companies, 60% are women, 20% are African American, and 15% are Latino.

Ultimately it is the intersectional identities of LGBTQ+ leaders—not just their sexuality—which makes them particularly valuable assets to corporate boards, says Halligan.

“I’m a good listener, I compromise, I partner, and this is a function of my background,” she says. “How much of it is that I’m a Lesbian? Probably a good deal of it and [the other] part of it is my upbringing.”

Houdart says that 25 years ago, there were very few conversations about the need for LGBTQ+ diversity in boardrooms and the need for LGBTQ+ worker protections.

“I’m convinced that if LGBTQ+ people are in the boardroom, the discussion will change,” he says. “And not only on LGBTQ rights, but maybe on other social issues.”