Does board gender diversity improve the welfare of lesbian, gay, bisexual, and transgender employees?

This paper focuses on two of the highly debated social issues corporations that are pressured to address—gender equality and workplace discrimination. Countries around the world mandate gender quotas on corporate boards to facilitate firms in addressing the issue of gender equality and anti‐discrimination legislations to address workplace discrimination. Gender diversity on the corporate boards can sway the board toward addressing more to the society and the environment—the external stakeholders of the firm. However, firms' social responsibilities extend to the internal stakeholders. We explore the effect female directors on corporate policies regarding a group of internal stakeholders—lesbian, gay, bisexual, and transgender (LGBT) employees and find firms with gender diverse boards that are more likely to adopt LGBT‐supportive policies. Our findings are consistent with the social role theory. Hence, firms should promote board gender diversity to encourage and facilitate inclusive workplace environment, eventually leading to sustainability in firms.