Investors Press for More LGBTQ Members on Bank Boards – Bloomberg Tax

Busy Burr, who was appointed last month to the board of SVB Financial Group, has a decades-long background in banking, venture capital and digital health ventures that make her a sought-after director. She’s also openly gay.

Burr, whose nickname Busy is short for Elizabeth, is one of a small but growing number of directors advocating for greater visibility of LGBTQ members on corporate boards. Goldman Sachs Group Inc., Nasdaq Inc. and the state of California are among entities in the past two years that formally recognized sexual orientation and gender identity as a component of diversity, alongside gender, race and ethnicity.

“They were looking for someone who had this combination of innovation and health-care experience,” said Burr, who’s on the boards of Rite Aid Corp. and digital mortgage company Mr. Cooper Group Inc. “The fact that I am a gay woman is also a double benefit. My wife is super happy I’m taking these positions.”

Investors such as BlackRock Inc. and Vanguard Group Inc. have been pressing companies to improve the diversity of their boards, particularly by adding women after the #MeToo sexual harassment movement and Black executives following the U.S. racial tensions of 2020. Nasdaq will ask all member companies of its stock index to delineate the diversity of their boards within the next year, including whether members self-report as LGBTQ.

To have an openly gay director is one more way that LGBTQ employees can see someone in power who they can identify with, said Burr, who stepped down last year as president of smoking-cessation company Carrot Inc. to spend more time on boards and other activities.

Just 25 Seats

Recognition for LGBTQ directors and other executives remains a work in progress, said Todd Sears, founder and chief executive officer of Out Leadership, which advocates for LGBTQ executives in the workplace, and OutQuorum, which helps LGBTQ executives prepare for board service. In a February report, the group found that only 25 seats among more than 5,600 board roles in the Fortune 500 were held by LGBTQ people, and some of those directors held more than one of those seats.

When Sears founded OutQuorum eight years ago, only Goldman and Bank of New York Mellon Corp. were among big companies that included LGBTQ as a component of board diversity and it was difficult to get search firms to make it a primary consideration, he said.

“They basically patted me on the head and said, ‘Isn’t that nice.’ Until our clients care about it, we don’t care,’” Sears said of past meetings with executive-search company executives.

Some things are changing, particularly in the last year, he said. There are now 19 companies in the Fortune 500 that have formally adopted a specific LGBTQ criteria for diversity, and OutQuorum has 1,300 out executives who are interested in board service — many of them trained by accounting firm KPMG LLP, an original corporate partner. Executive recruiter Egon Zehnder is now a sponsor, he said.

The growing awareness still isn’t manifesting itself as a priority in a lot of board searches, said Joel von Ranson, an out recruiter at executive-search firm Spencer Stuart. A Spencer Stuart analysis of the S&P 500 found that even as a significant number of boards now identify the race of members, only five directors were identified by name as identifying as LGBTQ, he said.

“I think people are hesitant to celebrate the LGBTQ status of people on their boards or in leadership,” von Ransom said. “It’s seen as more sensitive than other forms of diversity. But we need visible role models.”

NFL Linebacker

For Burr, it’s not an issue. She said she openly talks about her wife and sons — one is a filmmaker and the other plays linebacker in the National Football League — when she is interviewed for board roles. In November, she was the first new woman appointed to a S&P 500 bank after a three-month drought, which helped female directors surpass 34% of seats for the first time across the finance company boards.

The average number of women directors on the S&P 500 Banks Index was unchanged at 4.6, out of an average board size of 13.6. The percentage of female directorships rose to 34% from 33.5%. That compares with 30.4% for the broader S&P 500 Index.

• SVB Financial Group was the only company to increase the number of women directors.
• Citigroup Inc. has the most women on its board.
• Wells Fargo & Co., People’s United Financial Inc., Comerica Inc. and Citizens Financial Group Inc. have the fewest women on their boards.
• U.S. Bancorp and Huntington Bancshares Inc. have the youngest average board age, at 59 and 61 years, respectively.
• There are 13 S&P 500 Banks Index companies at or above the key threshold of 30% female board membership.
• The Bloomberg Gender-Equality Index declined 3.6% in November, more than the 2.2% decline of the MSCI World Index.

• The Bloomberg Gender-Equality Index is a modified capitalization-weighted index that tracks the financial performance of those companies committed to supporting gender equality through policy development, representation and transparency.

S&P 500 Banks Index companies ranked by percentage of female board members:

Here are the details on the ages of board members and their tenures:

NOTE: Age data for a given company may be marked NA if a person’s age is not publicly disclosed by the company.

To see the percentage of women on a company board: {FA ESGG <GO>}.

To see the percentage of women directors for each of the S&P 500 Banks Index companies: {S5BANKX Index GX <GO>}. In search box on top right, choose “% Women on Board.” Mouse over to get each company’s results.

To see more on Bloomberg Gender-Equality Index: {GEI <GO>}.

To see more on Bloomberg’s ESG fields and sustainable finance solutions: {BESG <GO>}.

–With assistance from Lauren Pizzimenti.

To contact the reporter on this story:
Jeff Green in Southfield, Michigan at jgreen16@bloomberg.net

To contact the editors responsible for this story:
Tim Quinson at tquinson@bloomberg.net

Daniel Taub

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Source: news.bloombergtax.com