Finance firms can move fast when it benefits the bottom line. That’s why Wall Street, despite its rigid alpha-male reputation, has been remarkably progressive on the issue of gay rights. From the breadth of domestic partner benefits to Goldman Sachs (GS) chief Lloyd Blankfein’s commercials in support of same-sex marriage, banks and brokerages have embraced this area of equality. Maybe that’s due to the industry’s war for talent, the spending power of gay clients, or Blankfein’s thesis that the market only cares about results.
Whatever the reason, the finance sector’s rapid adoption of gay-friendly practices presents an interesting challenge for Todd Sears. He founded Out on the Street, a lesbian, gay, bisexual and transgender (LGBT) group that’s grown from six member companies to 15 over the past three years. “It’s an exciting time,” says Sears, a former investment banker and ex-Merrill Lynch (BAC) financial advisor. “We’re at a transformative moment.”
The challenge now is to build the business case. With Rhode Island set to become the 10th state to legalize gay marriage, thanks to Republicans who are shifting their views to echo public sentiment, the danger is that many will assume the battle is won and move on. In any case, the moral case for diversity doesn’t play to the same fist-pumping instincts in financiers as figuring out new ways to make money.
So “return on equality” became the theme of the group’s third annual summit today at Goldman Sachs headquarters in downtown Manhattan. The invitation-only event, which brought together some 300 director-level executives to talk about LGBT issues and opportunities, drew an all-star lineup of supporters. Along with Blankfein, speakers included HSBC Holdings’ (HBC) U.S. chief Irene Dorner, Ernst & Young CEO Jim Turley, Vestart Capital Partners founder Dan O’Connell, KPMG CEO John Veihmeyer, and Bob McKillip of Royal Bank of Scotland (RBS). Their focus: how greater acceptance for gay employees is now extending to external intitiatives and recruitment, emerging leaders, and the business cost of policies that impede the immigration of LBGT families.
Among other things, Sears is looking to extend the Out on the Street franchise to a broader swath of the industry. “I’d like us to do more with mutual fund groups and asset managers,” says Sears, noting that he’s talked to BlackRock (BLK), the asset manager. He’s also looking to move into other industries like law, as well as other regions such as Hong Kong.
To be sure, a number of challenges loom large, not least of which is the Supreme Court decision expected in June that could promote sweeping marriage equality or set it back. While France recently became the largest of 14 countries worldwide to mandate equal marriage rights, sexual orientation remains a touchy and politically-charged topic. Take the Boy Scouts of America, for example. Faced with blistering criticism for its ban on gay members, the organization will soon have its members vote on a compromise proposal that would extend membership to openly gay youth, but not gay adults. That has spawned yet more criticsm and put board members like E&Y’s Turley, a vocal advocate of gay rights, in a bind.
When asked about the issue on April 29, and the response it evoked, Turley said he saw the proposal as “a step in an ongoing process and not the end of the debate.”
