The news that Manchester City have become the first Premiership football club to sign up for Stonewall’s Diversity Champions programme is another coup for the UK’s premier gay rights organisation.

Tony Grew spoke to Stonewall’s director of workplace programmes about football, life in the Royal Navy and the smart multi-national companies who understand that workers who can be open about their sexuality are more productive.

When Stephen Frost gives his presentation to business leaders about Stonewall’s Diversity Champions programme, his background in advertising is apparent.

He is fluent, persuasive and professional. He also knows that promoting good practice is just as much about making a business case as a moral or ethical one.

His message is one that many of the biggest employers in the country have listened to.

IBM, JP Morgan, BP, Barclays, HSBC, Ford, Deutsche Bank, Lloyds and HBOS are among the 230 organisations that have signed up to the programme.

The initial reason that corporations came to Stonewall may have been the 2003 change to the law that outlawed workplace discrimination against LGBT staff.

The take-up of Stonewall’s service has been brisk, from 65 organisations in 2004, to 100 in 2005 and 230-plus now.

The benefits to businesses are much greater than mere protection from employment tribunals:

“No longer can a business or an organisation claim that it is a leader and a good corporate and community citizen if it has got a problem with gay people. It is a key reputational matter,” says Frost.

“When the Royal Navy started working with us they weren’t simply talking about being nice to gay people. Quite frankly I am not interested in being nice to gay people. If a gay person is bad at their job they should be treated like anyone else who is bad at their job.

“By joining the Diversity Champions programme the Royal Navy sent out a huge message about their approach to women, to ethnic minorities, it was a general statement that they as an organisation had changed, that mistakes had been made in the past and now they want to get it right.

“They are looking to Stonewall to help them and since they joined with us in 2005, I can name you 10 things they have done, and they are 10 things that would not have been done if we had not been working with them.”

While the change in attitudes in the military is heartening, for many commercial organisations the motivations are more about profit than anything else:

“Productivity relates to our whole approach, which is business-led – the idea that people perform better when they can be themselves. Like I said it’s not about being nice to people, I get a sort of itch when i hear HR people talking about being a people person,” says Frost.

“When a gay person can be out and are supported, they are 20 -30% more productive. Therefore there is a moral case, a human rights case but most of all a business case.

“If you take an investment bank with 6000 staff, many of whom are on very high salaries, many of whom are bringing in a lot of money and working very hard, if 500 of them are gay and they are operating at a 30% productivity loss, that really adds up. You need to have those people operating at their best.”

With increased visibility for gay and lesbian people, sexuality at work is no longer a private matter in the way it might have been 20 years ago.

Businesses and government departments are starting to realise that the 3.6m LGBT people in the UK are their staff, clients, shareholders and customers.

With that in mind, Stonewall launched a major advertising campaign this year, aimed at heterosexual people on their way to work.

It featured an archetypal old-school employer, and carried the slogan: “You don’t have to be homophobic to work here but it helps! It’s 2006, not 1976. Discrimination at work. It’s so over.”

In order for organisations to recruit the best people, regardless of sexuality, they must be seen to be proactive in protecting all staff and providing a good working environment.

“When we launched our recruitment guide for the milk round last year. We did it for lesbian and gay students – there are 150,000 lesbian and gay people at university and 400,000 in further education in the UK.

“A lot of those people are ‘out’ in education and then when they enter the world of work they suddenly think, ‘Will I have to go back into the closet?’” says Frost.

“The recruitment guide was critical in showing here are some organisations who are saying, no, remain as you are, be yourself, we will take you as you are.

“The biggest user of that guide was not gay people it was straight women who saw it as a litmus test for where they want to work.”

Stonewall itself is unrecognisable from the small pressure group started in 1989 by Labour party activists. Their eventual success in persuading politicians to abolish Section 28, equalise the age of consent and introduce civil partnerships are their best known achievements.

They were also instrumental in getting recognition for anti-gay hate crimes, through the Criminal Justice Act 2003, and worked with government on the 2002 Adoption and Children Bill, which treated lesbian and gay couples in the same way as heterosexuals.

Most recently they have successfully pushed for protection against discrimination in the provision of goods and services, included in the Equality Act 2006.

Stonewall’s workplace programmes now employ eight staff in their 14th-floor central London offices. As I looked out over the Houses of Parliament below, Frost outlined how they came to recruit Manchester City FC as their latest diversity champion:

“Clearly we were thrilled because it is the first UK football club to ever make such a move and they should be applauded for their leadership. It is a very courageous but also intelligent decision.

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“We have been talking to clubs for a few years now and you can understand their nervousness about raising their head above the parapet.

“Man City to their credit is a club we have had enough conversations with for them to realise that actually this is not as radical as it sounds. In some ways its the next logical move.

“They already support Manchester’s One City diversity programme, they already help train the local gay football team. They already hold civil partnerships ceremonies at the City of Manchester stadium.

“Why wouldn’t they support the 10% of their staff that are gay? Why wouldn’t they send a message to gay supporters that they are welcome here?

“Why wouldn’t they say to straight dads bringing their son to a match on a Saturday afternoon we think its really bad that your son has to hear homophobic chanting on the stands.”

Frost is confident that Man City’s decision, and the overwhelmingly positive response it got from the press, will encourage other clubs to sign up to the diversity programme. It will also hopefully encourage other businesses who do not perceive a problem within their workforce to think again about how they promote diversity.

That diversity itself can be seen as a business asset. Frost uses an academic comparison to make the point:

“I find it bizarre that in economics classes throughout the UK and US we realise that value comes from the margin not the average. We look for the new niche market not the mass market. Why wouldn’t that apply to your people?”

Now Man City will begin a process of benchmarking, working with Stonewall’s diversity team to identify targets and through them measure progress and performance. Much of it is seemingly obvious, such as offering diversity training to all staff, or sponsoring an LGBT event.

Other performance measures are more practical, such as advertising jobs in the gay media and appointing a person at board level to take the lead in diversity issues. It is not about changing the structure of companies, but changing how staff are treated.

Frost explains his approach:

“The reality is that on a trading floor or police station or a navy warship, banter is the glue that makes that team work. One has to be very careful about making this stuff come across as namby-pamby basket weaving.

“What we have to talk about is within that environment that exists what are the things that we can tweak to make it better.”

There are a number of major police forces who are members of the scheme. Frost explains that true diversity is not just an exercise in self-censorship:

“With the police force it is about saying ‘actually there are some words which are unacceptable, and we would prefer that you didn’t use them, but actually lets talk about the fact that you don’t understand what sexual orientation actually means.’

“Not every gay copper is going to jump on you and actually they are very good at their job and they just want to be allowed to get on with their job.”

It is a similar story in the highly stressed atmosphere of a City institution: “On the trading floor, it is absolutely not about being soft, or less competitive than your straight peer.

“It is about knowing that if your partner is taken really ill, or their father dies, you can have a couple of days off work and not have to lie about it, and you can say it is bereavement leave and not my annual leave, and maybe have a picture of your partner on your desk.”

Stonewall publish an index of the top 100 employers in the UK, based on the benchmarking they undertake with clients. Many of the best performers are national and local public organisations, such as Staffordshire Police, currently top of the chart, the Department for Work and Pensions, Manchester City Council and the Department of Trade and Industry.

There are 13 police forces in the top 100, along with the Home Office, HM Prison Service, HM Revenue Customs and the CPS.

The most striking thing about the diversity programme is how proud the organisations who take part are of the changes they have made. Another effect is the way that best practice in HR is now flowing from the London offices of multi-nationals to head offices in New York.

Frost is now primed to take on the largest employers in the UK – small and medium-sized businesses. Stonewall will be launching a guide later this year aimed at them, working closely with the DTI and the Federation of Small Business.

While 230 large employers are already diversity champions, it is clear there are hundreds more who are not. The team at Stonewall will be preaching the message of diversity for the foreseeable future.

As Frost reminds us, it was 1976 that the Equal Pay Act was passed, and 30 years later women still earn 17% less than men. Legal protection is only the first step in changing the workplace culture.