Brett McDonnell (University of Minnesota Law School) has posted Queerying Corporate Governance on SSRN. Here is the abstract:
There has been much discussion of efforts to diversify corporate boards with respect to race and gender. Some of these efforts also feature mandates to include LGBTQ board members, but less attention has been paid to this dimension of board composition and diversity. This paper begins with three short essays displaying contrasting positions on this question: The first essay supports efforts to diversify the board using arguments common within mainstream corporate governance scholarship. The second essay draws on queer theory and other critical approaches to argue that merely adding a few LGBTQ board members while maintaining the standard structure and goals of large capitalist businesses will accomplish little. The third essay makes a conservative critique of board diversity efforts, arguing that they will harm shareholder value and that concern for a traditional understanding of morality and social order should cause us to slow down in pursuing rapid reforms surrounding core norms and social structures.
The remainder of the paper compares and contrasts these conflicting perspectives. It argues that each of them brings significant truths and insights to the table, while also containing major blind spots. It considers the business case for DEI, the social justice case for DEI, and the relative effectiveness of different tools of corporate governance. The paper ultimately presents recommendations and predictions. The paper recommends empowering employee resource groups (ERGs), which already exist within most large corporations, to nominate directors. LGBTQ ERGs, as well as race- and gender-based ERGs, could propose director nominees to the board nominating committee, with the committee having to publicly explain if it chooses not to accept such nominees. This could (and should) be extended to other ERGs representing other interests, including those which may be more conservatively inclined, such as faith-based and veterans’ groups. The paper also suggests sub-board level diversity councils, staffed by employees and managers, with power over creating and monitoring DEI workforce policies. This process should not be legally mandated, though it could be legally encouraged, e.g. with a comply or explain requirement. The paper predicts its recommendations will not be adopted and concludes by considering how even existing boards and managers may be in a promising position, relative to other elites, to navigate the rough currents of the cultural wars. The need to satisfy, or at least to not too badly alienate, a broad and diverse range of employees and customers gives managers of large, consumer-oriented companies incentive to find ways to communicate messages that a wide spectrum of persons within our divided society find acceptable.
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