A revolution in the boardroom: Why it pays to be gay

Homosexuals are being courted by employers – from spooks to the city

When Angela Mason began her 10-year directorship of the Stonewall gay lobby group in 1992, she had a friend in the corporate world who had two phones in his house. One he used to take personal calls for him and his partner. The other was for the office. When it came to being out and proud in the workplace, few and far between was the employee who would happily step out of the closet and declare: "I'm gay, let's do business."

"People used to genuinely fear that they would lose their jobs if they were outed, and many did," Mason remembers. "If you were found out it was absolutely the end."

It was with some sense of satisfaction, therefore, that Ms Mason read the news this week that MI5 was finally going to step out of the closet itself and begin openly recruiting people from within the gay community.

One of the last bastions of the British establishment, a place that, until the early 1990s, had actually banned hiring gays because of fears that outed spies could be blackmailed, had finally capitulated and realised that if you want to hire the best talent, you have to look at all sections of society. The days of the Oxbridge don giving white, male graduates a tap on the shoulder and a nod towards Thames House were truly over.

The domestic intelligence service is now not only going to start actively employing openly gay recruits, it is also hiring Stonewall (a group once associated with, and run by, former radicals such as Ms Mason) to advise the security services on how to encourage its spies to be more open about their sexuality and how to persuade more gay applicants to apply for jobs there.

But as dramatic as MI5's announcement seems, it is part of a much wider silent revolution that Stonewall has been pursuing for much of the past decade – persuading the corporate world to love gays. And in the past few years it finally seems to be working.

In the late 1970s, Ms Mason, a young member of the anarchist Angry Brigades group, was tried and acquitted for planting bombs on the doorsteps of Conservative politicians. She divorced in the 1980s to live with her lesbian lover and, by 1992, had been appointed director of Stonewall.

With such an anti-establishment figure heading Britain's foremost gay lobby group, Stonewall might have been expected to continue with the sort of tactics that had made its new director so notorious. Instead, Ms Mason, and Ben Summerskill, her successor as chief executive, did something far more radical – they took Stonewall mainstream and began charming, rather than confronting, the corporate world.

The outcome of that tactic is that MI5 has now joined more than 430 companies, representing more than four million employees, who have signed up to Stonewall's list of "gay-friendly employers". Those on the list actively recruit gay people and monitor the sexual orientation of their staff to ensure against silent discrimination.

Many encourage their gay and lesbian staff to take part in Pride events as well as supporting the events financially. They are also expected to have clear and publicised policies for dealing with cases of sexual discrimination and encourage the promotion of openly gay staff on to the board or senior management team.

With 15,000 gay students leaving university every year and an estimated 1.7 million gay men and women of working age, Stonewall began persuading companies that discriminating against gay employees was simply bad for business.

The corporate world began to see sense. Where once people were fired for their sexual orientation, major corporations now jostle with each other to prove their equalitarian credentials.

To provide an incentive, Stonewall began producing an annual list of "top gay employers". Local authorities, charities and the voluntary sector all scored well but, every year, more and more mainstream corporations began appearing on the list.

By 2007, IBM, LloydsTSB, KPMG and Goldman and Sachs all came in the top 10 and the pro-pink feeling is spreading. This year, Pinsent Mason became the first law firm to be included in the Top 100 gay employers and next year Stonewall expects to have at least 16 more.

"The trick is to present the business case to corporate employers," says David Shields, director of workplace programmes at Stonewall and the man who has spearheaded their campaigning in the corporate world.

"It simply doesn't make good business sense to have a reputation for being a workplace that is not open to gay and lesbian employers. Graduates who were out and proud at university are simply not willing to hide away once they get into the workforce. They'll simply take their skills to another company."

For Mr Summerskill, persuading MI5 to become a gay-friendly employer was proof that even those organisations not historically thought to be friendly towards the gay rights movement are, in fact, coming in from the cold.

"I think what's really interesting about our corporate approach in the past three years is the sheer variety of companies we have attracted," he says. "Many of them are not the usual suspects you would have signing up, and I think what we did with MI5 is an example of that. These are very counter-intuitive organisations. Even though the ban on recruiting gay spies was lifted more than a decade ago, the message had trouble sinking in.

"But MI5 is so focused on recruiting the very best talent that they realised it was critically important to hire staff from all walks of life."

Ashley Steel is the only known lesbian on the board of a Square Mile company. She came out five years ago after spending some time working for KPMG's offices in San Francisco.

"I think once I'd fully come out I knew I couldn't go back in," she says. "I've been at KPMG for more than 23 years now and it is a completely different place to what it used to be."

She says major corporations are so keen to harness the best talent that former prejudices have had to be dropped.

"If there is a war of talent going on, then why on earth would you want to put people off who are gay or black or female? It simply doesn't make business sense. And I think clients want to see a diverse workforce."

She believes there is still some way to go – after all, there is no openly gay person on the board of a FTSE 100 company. "Groups like Stonewall were originally set up to change the law and they did. We have thing like the equalities bill and civil partnerships. But changing a law doesn't change a person's behaviour, and that is what they are trying to do with the corporate sector."

Angela Eagle, the first lesbian MP to come out while still in the House of Commons, agrees. "What we have is legal equality in theory, but that does not necessarily eliminate the discrimination that continues to exist," she says.

But for Ms Mason, who now works at the heart of government advising local authorities on equalities and cohesion with the Improvement and Development Agency, the corporate change of heart could hardly be more stark.

"Those companies that have positive employment practices do it precisely because it signifies modernity," she says. "It's cutting edge and glamorous. There's still lots to do but when I look back, we have come miles and miles."

Six pioneers in the corporate world

Ashley Steel, KPMG

A vocal and openly gay director at KPMG, Ashley Steel is the only known lesbian on the board of a Square Mile company. She has regularly spoken out about how the corporate world needs to do more to promote gay people in the workplace. She came out only after working for KPMG in San Francisco. In 2005, she became KPMG's first board champion on sexual orientation.

Paul Tanner, 90TEN

The owner of healthcare communications agency 90TEN, Paul Tanner specialises in PR and medical education for pharmaceutical companies and the NHS. He has launched numerous award-winning health initiatives to encourage gay men to test for HIV and vaccinate themselves against hepatitis A and hepatitis B.

Sir Michael Bishop, BMI

A former baggage handler at Manchester airport, Sir Michael, above, turned BMI into the UK's second largest airline after BA. Not known for speaking out about gay rights, his presence at the head of BMI proves being out and gay shouldn't stop you getting ahead in business.

Robert Taylor, Kleinwort Benson Private Bank

One of the City's best known openly gay movers and shakers, he earnt his stripes at Coutts & Co where he was head of private banking. Is now chief executive of Kleinwort Benson Private Bank.

Angela Mason, activist

Radical campaigner turned government insider, Angela Mason began her political career as an anarchist with the Angry Brigades in the 1970s before coming out in the 1980s and taking up the gay rights cause. Served as director of Stonewall throughout the 1990s, making it more mainstream, charming corporations and leading the fight for the repeal of Section 28. She now chairs the Fawcett Society, a women's rights campaigning organisation

Charles Allen, Global Radio

A former chief executive of ITV, the openly gay Charles Allen is now one of the most powerful figures in the world of radio. His company, Global Radio, is the UK's largest radio provider and includes the popular Heart, LBC and Galaxy radio stations.