New research from Northeastern University has found that Fortune 500 companies with LGBTQ+ board members are outperforming their peers in financial and non-financial metrics.
“These companies tend to do better in sustainability performance measures, better on financial performance and long-term risk and some organizational outcomes,” said Ruth Aguilera professor of international business and strategy at Northeastern University’s D’Amore-McKim School of Business. She added: “Having diverse points of view can mitigate risk and can offer new solutions, as long as they are integrated in the board.”
According to a recent Gallup survey, more than 25 million individuals in the United States identify as members of the LGBTQ+ community. That’s 7.6% of the country’s population. Despite this, Northeastern’s research shows directors who are openly vocal about their LGBTQ+ identity hold under 1% of board seats. “Out LGBTQ+ individuals held only 74 of more than 7,700 available board seats at the end of 2024.”
Students at Universitat Autònoma de Barcelona observed 441 American corporations and their board membership and diversity policies in 2021 and 2022. This research evaluated two areas of performance: environmental, social and governance (ESG) scores, and enterprise value.
The research found that firms with visible LGBTQ+ board members have higher ESG performance than firms without visible LGBTQ+ directors. Student researchers Aguilera and Ryan Federo credit this to the diversity of viewpoints offered by LGBTQ+ board members, according to Northeastern Global News.
“One of the worst things that can happen on a board is that there is group thinking,” Aguilera said. “That happens when everybody has very homogenous views or when there is no psychological safety for different individuals to voice their opinions.”
The researchers also added that this discovery offers new paths for other diversity studies, by examining types of diversity that might not be readily identifiable such as veteran status, neurodiversity, or disability.
“A lot of research up to now has looked at these diversity metrics that are more obvious, like race or gender,” Aguilera added. “Now we are in a new space, which is more about cognitive diversity.”
