Analysis of nearly two decades of corporate data reveals that large companies with stronger LGBTQ+ inclusive policies and practices delivered increasingly strong financial results the longer they had these policies in place.

Over a 10-year period, top-scoring companies reported average net income more than eight times higher than their lowest-scoring peers. A similar theme emerges from an investor guide published by Open for Business in 2024, which pointed to a connection between financial performance and corporate LGBTQ+ transparency.

This was backed up by related research that examined transparency levels at the 290 largest publicly-listed companies in the UK, the USA, Germany, and Australia, and found that those with the top 25 transparency scores were 2.3 times more profitable than those with the bottom 25 scores.

Talent management

Alongside such financial performance metrics, LGBTQ+ inclusion has been shown to burnish a company’s brand, and to improve talent attraction and retention among not only people who identify as LGBTQ but also those who do not; for example, according to the Centre for Talent Innovation, 72% of ‘allies’ are more likely to accept jobs at inclusive companies.

Despite such data, we still see quite a stark absence of ‘out’ LGBTQ+ leaders in the corporate world. For example, in the USA Fortune 500 listing with around 5,500 board seats, there are apparently only around 50 openly LGBT board members, whilst in the UK there appears to be not one publicly ‘out’ LGBT leader of a FTSE 100 organisation.

But why should the lack of out LGBT leaders matter to boards? Surely that is the private choice of the LGBTQ individual? Well, our research says it does matter to boards and to the organisations they oversee, because absence of ‘out’ leaders can indicate the existence of an organisation culture or climate that deters LGBTQ leaders being themselves.

The study, which involved in-depth interviews with 24 senior LGBTQ leaders across the private, public and third sectors, shows us the benefits of coming out are clear: being out was described as liberating and emancipatory.

Energy and focus

Open disclosure removed the anxiety of being “found out,” allowing time and space for greater energy and focus. There is a power attached to coming out, which brings what we call an “authenticity dividend”: greater happiness at work, stronger engagement and improved performance. As one participant remarked:

“There is a power in authenticity. There is a power in being yourself. And I think it does inspire people, and helps takes people along with you.”

The testimonies of LGBTQ+ leaders underline a simple truth: when leaders can be authentic, they thrive—and so do their organisations. We can summarise why it matters to boards:

• Culture and conduct oversight. Lack of role models/policy that is tokenistic and not embedded in systems and shared values.
• Talent pipeline and succession. If LGBTQ+ leaders plateau below senior levels, boards can lose access to a wider pool of talent, undermining the leadership bench strength.
• Reputation and stakeholder trust. Investors and employees are alert to anti-EDI sentiment at macro levels. How organisations respond is of interest. For example, some organisations have excluded their LGBTQ+ workforce from attending Pride.
• Strategic value creation. Diverse and authentic leadership is linked to innovation, risk management and stronger performance. A wider talent pool ultimately profits from the pink pound.

When boards look across their organisations and see no openly LGBTQ+ leaders, it raises questions. The crucial issue is whether people feel able to come out. Many don’t. This can place a heavy personal burden on the individual and their families, which in turn can undermine both wellbeing and performance at work. Yet for many LGBTQ+ professionals, concealment is part and parcel of their reality. Indeed, it is often used as a coping mechanism in navigating their careers—or as one participant described it, a form of “strategic closeting”.

Few LGBTQ+ employees will risk coming out in environments that feel hostile or unwelcoming. Furthermore, negative reactions from colleagues to individuals who do come out can damage both individuals and organisations.

Authentic inclusion means having workplaces that embrace our differences. Cultures of inclusion don’t happen automatically, they must be consciously built through our systems, structures, leadership styles and shared values.

How boards can play a part

1. Look for visibility in HR data, such as LGBTQ+ pay gap reporting, exit interviews/responses, bullying and harassment reporting, numbers who have disclosed their sexual orientation and in which job roles/pay bands. This can help to identify gaps to inform talent management programmes.

2. Embed inclusion in succession planning through targeted reciprocal mentoring programmes and leadership coaching.

3. Scrutinise culture beyond rhetoric. Qualitative and quantitative data will help to assess whether inclusion is embedded.

4. Set the tone at the top. LGBTQ+ representation on boards, or visible allyship from directors, sends a powerful signal.

5. Treat LGBTQ+ inclusion as governance. Position it within risk, reputation and long-term value creation. Allow staff networks to have a voice at board meetings.

Authenticity is really made possible when boards help to create the conditions for it: ensuring safety, visibility and consistency between espoused values and daily practice. Our study shows the prize can be significant: stronger leadership, with leaders who perform better when they can be themselves.

Aidan McKearney is professor in human resource management and organisational behaviour at Hult International Business School and Richard Dunston Brady is equality, diversity and inclusion (EDI) manager at Harrogate and District NHS Foundation Trust.