Do women advance equity for LGBT employees?

Introduction

With the goal of workplace inclusion front of mind, the past decade has seen increasing support for minority groups, such as those identifying as Lesbian, Gay, Bisexual and Transgender (LGBT*). This support is reflected in the policies and practices that govern day-to-day organisational life. For example, according the Human Rights Campaign (2014), nearly 90% of Fortune 500 companies now have sexual orientation non-discrimination policies.

The question is: what predicts LGBT-friendly policy adoption? Previous research has identified the positive influence of company peer pressure, powerful sponsors and active networks, but what about the demographic profile of leadership groups? Could the increasing percentage of women in senior leadership be a factor connected to the pace of change?

Associate Professors Alison Cook and Christy Glass from Utah State University sought to explore this question, by examining whether the presence of a female CEO and female board members predicts the likelihood of an organisation adopting LGBT-friendly policies. The argument being that, consistent with social role theory (Eagly et al., 2000), women are more equity oriented than men and socialised for collaboration rather than competition.

Ultimately, the research found that in terms of advancing LGBT-inclusive policies, gender diversity in the boardroom is key. Specifically, the percentage of women on the board and the presence of influential female directors had the strongest impact on the number, and range, of LGBT-inclusive policies offered by an organisation.

Aim

To explore their research question, Cook and Glass drew on the small body of previous research available, and developed a series of theoretically-derived hypotheses, summarised below:

  1. Firms with female CEOs are more likely to offer LGBT-friendly policies
  2. The proportion of females on the board, as well as the degree of their influence, relates to the likelihood of LGBT-friendly policy adoption
  3. The greater the proportion of females on the board, and the greater their influence, the more likely a female-led firm will be to offer LGBT initiatives.

Methodology

Biographical data was collected for all CEOs and board directors for Fortune 500 firms between the years 2001-2010. The list of firms for the 10 year period was collected from the money website of CNN, allowing examination of the United States’ largest companies with representation across almost every industry. LGBT policy information was collected from the Human Rights Campaign website. Sample sizes varied for different analyses (based on availability of information at each time point) and ranged up to 3,818. A series of advanced statistical techniques were employed, designed to be appropriate for the nature of the data and allowing the exploration of each hypothesis.  Importantly, a number of key variables were controlled for, including firm size, industry and board age.

Key findings

Overall, the research revealed that leadership composition is an important predictor of LGBT policy adoption, supported by three key findings:

  1. Firms with female CEOs were more likely to offer LGBT-friendly policies: In partial support of the first hypothesis, firms led by women were more likely to provide domestic partnership benefits and adopt a gender identity non-discrimination policy, but not a sexual orientation non-discrimination policy. In other words, organisations need more than just a female CEO if they wish to promote an environment that is fully supportive of LGBT employees.
  2. The most important factor in predicting LGBT policy adoption is board diversity: Strong support for the second hypothesis indicated that the larger the proportion of females on the board, and the greater their influence with directors on other boards, the more likely a firm was to adopt the entirety of LGBT-friendly policies (e.g. sexual orientation non-discrimination policy; gender-identity non-discrimination policy; and domestic partner benefits). Drawing once more upon social role theory, females on the board appear more likely to champion diversity, inclusion and equity, and their presence and influence therefore drives the progress of policy adoption.
  3. Firms led by female CEOs did not experience additional impetus from the number of women on the board or the presence of influential women directors: Unexpectedly, and contrary to hypothesis three, diversity ‘matching’ – i.e. firms with a female CEO and a gender diverse board – yielded no additional impetus in terms of how likely a female-led organisation would be to offer LGBT-friendly policies. Separate analyses revealed that male led firms, on the other hand, did experience additional impetus from both the proportion and influence of women on the Board – a key finding in a contemporary context where, for example, the number of women holding CEO positions is just 4.2% among Fortune 500 companies in the US (Fortune Knowledge Group; Royal Bank of Canada, 2017).

Implications

To attract, recruit and retain high performing employees – irrespective of sexual orientation or gender identity -– firms must implement policies aimed at building an inclusive workplace. Such policies not only improve the day-to-day workplace experience of LGBT employees, but also benefit entire organisations, enhancing their brand and effectiveness.

This research provides evidence regarding the positive indirect role played by influential, female board members in influencing the adoption of organisational LGBT-friendly policies. The authors argue that the women’s influence comes through two mechanisms “providing a critical mass of support” and “serving as conduits for information about policy adoption among other companies”.  Critically, given the high proportion of male CEOs, the research identified that Board diversity also exerts a powerful influence on male CEO support for LGBT-friendly policies.

 

For more information, contact Sam Fowler

To read the full article, see Cook, A., & Glass, C. (2016). Do women advance equity? The effect of gender leadership composition on LGBT-friendly policies in American firms. Human Relations, 69(7), 1431-1456.

*The term ‘LGBT’ was used in the original research paper to refer to Lesbian, Gay, Bisexual and Transgender. The research did not address broader Intersex, Asexual or Queer organisational policies.

 

References

Adams, R. B. & Funk, P. (2009). Beyond the glass ceiling: Does gender matter? Management Science 58(2), 219–235.

Badgett, M. V. L., Durso, L. E., Mallory, C. Kastanis, A. (2013). The business impact of LGBT-supportive workplace policies. UCLA: The Williams Institute. Retrieved from: http://escholarship.org/uc/item/3vt6t9zx

Blazovich, J., Cook, K., Huston, J., & Strawser, W. (2013). Do gay-friendly corporate policies enhance firm performance. Social Science Research Network, Working Paper Series.

Day, N. E., & Greene, P. G. (2008). A case for sexual orientation diversity management in small and large organisations. Human Resource Management, 47(3), 637-654.

Dezso, C. & Ross, D. G. (2012). Does female representation in top management improve firm performance? A panel data investigation. Strategic Management Journal, 33(9), 1072–1089.

Eagly, A. H., & Karau, S. J. (2002). Role congruity theory of prejudice toward female leaders. Psychological Review, 109(3), 573.

Eagly, A. H., Wood, W., & Diekman, A. B. (2000). Social role theory of sex differences and similarities: A current appraisal. The Developmental Social Psychology of Gender, 123-174.

Human Rights Campaign (2014) Available at: http://www.hrc.org/resources/entry/lgbt-equalityat-

the-fortune-500. Retrieved April 2015.

Konrad, A. M., Cannings, K., & Goldberg, C. B. (2010). Asymmetrical demography effects on psychological climate for gender diversity: Differential effects of leader gender and work unit gender composition among Swedish doctors. Human Relations, 63(11), 1661-1685.

Fortune Knowledge Group and Royal Bank of Canada. (2017). Transforming the C-suite:

Developing and Advancing Women Leaders,  March, 2017. Retrieved from http://www.rbc.com/newsroom/news/2017/20170307-fortune.html


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