By Rachel Feintzeig And Daisuke Wakabayashi
Apple Inc. Chief Executive Tim Cook said Thursday that he was
"proud to be gay," a declaration that puts an openly gay man at the
helm of the world's most valuable company.
Rumored for years, the news surprised few who follow the company
closely. But it was nonetheless a signal moment in a social and
legal transformation that has cut acrossAmerican life.
"If Tim Cook can be openly gay, then it just shouldn't matter in
any other corporation in America," said Trevor Burgess, the openly
gay CEO of the Florida bank C1 Financial Inc., which went public in
August.
Acceptance of gays and lesbians in the U.S. has moved rapidly in
the last decade. Same-sex marriage is now legal in more than 30
states after campaigns often backed by major corporations like
Amazon.com Inc., and high-profile people in sports, entertainment
and politics have come out in recent years.
Still, executives' positions on social issues--and their
personal lives--can have an impact on business. Dan Cathy, CEO of
Chick-fil-A, has spoken in support of traditional marriage and the
company's charitable arm has donated to groups opposing same-sex
marriage. His stance sparked a backlash among some consumers, but
it sent many others lining up at stores to support the executive
and his views.
In an interview with the Atlanta Journal-Constitution earlier
this year, Mr. Cathy said his candor harmed business, and said he
wouldn't speak out further--though, he added, his beliefs haven't
changed.
Openly gay executives are still rare, even as companies have
ramped up their recruitment of employees who are gay or
transgender, and have expanded benefits for same-sex spouses. Mr.
Cook is believed to be the only openly gay CEO among the Fortune
500 list of top U.S. companies.
Mr. Cook, 53 years old, said he didn't come out before because
he strongly values his privacy, but decided to do so now because he
felt it might help others.
"I don't consider myself an activist, but I realize how much
I've benefited from the sacrifice of others," he wrote in an essay
in Bloomberg Businessweek. "So if hearing that the CEO of Apple is
gay can help someone struggling to come to terms with who he or she
is, or bring comfort to anyone who feels alone, or inspire people
to insist on their equality, then it's worth the trade-off with my
own privacy."
For a CEO of any major company, making a big personal statement
is something boards must manage very carefully. Apple is very much
at the whim of consumers, and the reaction among the company's
business partners abroad shouldn't be easily dismissed. Though he
said many Apple colleagues knew he was gay, Mr. Cook went to his
board before publishing the essay.
Executives who are openly gay praised Mr. Cook's decision to
come out, but some cautioned that a flood of pronouncements from
other CEOs is unlikely.
Whispers about Mr. Cook's sexuality implied that it was
something to be ashamed of, said Sam Altman, the president of the
startup incubator Y Combinator. Going public "removes the shame and
the message that [sexuality] needs to be hidden," he said.
The effects may be felt most strongly among senior managers on
track to take CEO roles in the coming years, said Kirk Snyder, a
diversity consultant who works with Fortune 500 companies. "That
path has now been cleared," he said.
Ted Bililies, a CEO coach and managing director with business
advisory firm AlixPartners LLP, said that executives should have a
right to privacy but technology and social media has eroded it.
Increasingly, executives are expected to share their private lives
with the public, he said, a trend that could keep some from
pursuing leadership roles.
"Executives need to understand that the bar has just been raised
around personal disclosure and they better be prepared to disclose
things they perhaps never would have in the past," he said.
In 29 states people can still be fired for being gay, and more
than half of LGBT workers hide their identities at work, according
to a Human Rights Campaign report published earlier this year.
Former BP PLC chief John Browne was closeted during his time
running the oil giant for fear the company would lose suppliers and
customers or be viewed as weak by competitors or foreign
governments. He was outed in 2007 amid revelations that he had lied
in court about how he met his ex-boyfriend. He later wrote a book
about life as a closeted CEO. Coming out is good for business, he
argued, and staying closeted inhibits business leaders'
interactions with their teams.
Beth Brooke-Marciniak, the global vice chair for public policy
at professional services firm EY, the parent company of Ernst &
Young, called Mr. Cook's announcement a "game-changer."
She came out about three years ago with lots of help from a team
of internal public relations staff and LGBT leaders who guided her
through the process. "It's not business as usual," she said. "It
does have to be managed."
Mr. Cook, who joined Apple in 1998 and took on the CEO role
after Steve Jobs stepped down in 2011, has been vocal about the
importance of human rights and equality, at times speaking
forcefully about the rights of gay individuals.
Earlier this year, Apple urged Arizona Gov. Jan Brewer to veto a
bill that allows the state's businesses to refuse service to gay
customers on religious grounds.
Ben Schachter, an analyst with Macquarie Securities, said Mr.
Cook's announcement is unlikely to have a business impact on Apple,
but other executives have acknowledged that speaking out may come
with costs.
Speaking at a conference in 2012, Goldman Sachs Group Inc. CEO
Lloyd Blankfein said the bank lost at least one client after he
spoke out in favor of gay marriage.
Younger gay executives now ascending the corporate ladder say
their generation may simply make a natural transition to the
C-suite without much friction or fanfare.
Mr. Burgess, the bank CEO, said he was open about his sexuality
throughout his career, including 10 years as an investment banker
at Morgan Stanley.
"There's no need to come out," he said. "I didn't come out when
I rang the bell at the New York Stock Exchange. I've been out since
I was 19."
Y Combinator's Mr. Altman, who is 29 and has been out since high
school, said the influence of Mr. Cook's coming out will take years
to realize as teenagers see his example and come out
themselves.
"I hope it will make people realize, not just in tech, if the
biggest company in the world can be run by a gay guy then it must
be fine to be gay in business."
Write to Rachel Feintzeig at rachel.feintzeig@wsj.com and
Daisuke Wakabayashi at Daisuke.Wakabayashi@wsj.com
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