Workplace equality laws spark surprising gains for women in the boardroom, research finds

Amid global rollbacks of Diversity, Equity, and Inclusion (DEI) initiatives—from the United States to parts of Europe—a new study has found that US state-level protections for LGBTQIA+ employees are not only helping to curb workplace discrimination, but are also driving greater gender diversity in corporate boardrooms.

The research spans nearly two decades and over 700 companies, revealing that Employment Non-Discrimination Acts (ENDAs)—prohibiting bias based on sexual orientation or gender identity—have led to a 4.3% increase in female board representation among firms in states that adopted them, despite the fact that the laws did not apply at board level.

Drawing on nearly 25,500 firm-year observations from 36 US states between 2001 and 2018, it identifies a compelling “spillover effect,” where inclusive employment laws help embed prosocial values across entire organizations and even influence leadership structures.

Lead author Professor Jia Liu, Director of the University of Portsmouth’s Center for Innovative and Sustainable Finance (CISF) said, “While ENDAs are designed to protect LGBTQIA+ employees, our research shows that they also reshape corporate norms around inclusion more broadly. This leads to more women being appointed to boards, especially in firms with Democrat-leaning CEOs.”

The research also demonstrates that the increase in board diversity is stronger in companies led by women, but weaker or even regressive in firms led by more conservative Republican-leaning executives.

Most notably, it appears that female board members appointed after ENDA adoption are strongly proactive and are more likely to be independent directors and serve on influential audit and compensation committees, amplifying their positive impact on corporate governance.

The study further argues that the “spillover effect” identified signals a broader shift in societal expectations, as organizations endeavor to maintain legitimacy among their corporate peers and stakeholders. This phenomenon, known as institutional isomorphism, drives companies to mirror the social and legal environments in which they operate and adopt the normative behaviors of other companies in their sector.

Professor Liu added, “Our findings show that social values, not just formal regulations, drive structural change in corporate America. As laws protecting LGBTQIA+ workers take hold, they encourage firms to internalize prosocial behaviors, facilitating organic change. “

The findings coincide with critical developments in the global debate on boardroom diversity and at lower levels of employment. While mandatory quotas have had success in countries such as Norway and Italy, similar endeavors have been rejected by more conservative US states—for example, California’s 2018 gender board mandate was struck down in 2022.

“This research offers hope that meaningful diversity improvements can come from social norm shifts, not just top-down mandates,” explained Professor Liu. “It suggests that equality-focused legislation, even when narrowly targeted, can catalyze broader organizational reform.

“With many multinational firms operating across US jurisdictions, or listed on US exchanges, these changes create real compliance risks. They also raise ethical questions around ESG and DEI commitments.”

The study offers evidence for policymakers and regulators seeking to improve corporate inclusivity without provoking negative repercussions. By illustrating how protections for one marginalized group can foster systemic change in another, it advocates for a more integrated view of equity and governance reform.

The paper is published in the British Journal of Management.