By its nature, LGBT representation is hard to measure. People must choose to come out in order to be counted, but there needs to be an inclusive working environment before doing so.

Out Leadership estimates that there are fewer than 10 openly LGBT members of corporate boards in the entire Fortune 500—less than 0.3% of all board members. In comparison, conservative estimates suggest 4% to 5% of the entire U.S. population identifies as part of the LGBT community.

This says that either LGBT people are not rising to the top of the most successful businesses, or that they do not feel they’re able to come out as they aspire to the most senior positions. In either case, companies should be very concerned.

An absence of visible examples of LGBT diversity at the very top of an organization hurts a company’s ability to recruit from the widest possible pool of the brightest graduates. When LGBT people cannot see that others like them have been able to reach the top, they might well choose an employer with a better record of LGBT inclusion. In the U.S., 80% of LGBT respondents to a 2011 Out Now Global survey said that a prospective employer’s LGBT equality and diversity policies were an “important” or “very important” factor in their decision to accept a position.

Internally, this lack of LGBT representation on boards sets a tone from the top that may affect the productivity of a company’s employees. If board members cannot come out at work, other employees will keep their sexuality a secret; and while it is almost impossible to quantify the cost to productivity of being closeted at work, there is robust evidence to suggest that companies pay a price when their employees cannot bring their whole selves to work.

Fundamentally, however, it prevents the board of a company from serving its purpose most effectively. Boards exist to catalyze and test the thinking of the executives and to make sure that the long-term future of the company is considered in all decisions.

Diverse opinions are essential for boards to improve their decision making and to challenge the accepted ways of thinking within a company. This is only possible if the boardroom environment is one in which its members feel comfortable challenging the consensus in the room. Boards where members do not feel able to be themselves are far less likely to be open to the frank discussion required to run a company properly.

To address these issues, I believe that two things are required. First, board members should be encouraged, but not required, to disclose their sexuality. Second, regulators, such as the SEC in the U.S. and the Prudential Regulation Authority in the UK, should mandate that boards report these results to the public. This is not a question of doing good. It is good business.

More authentic, open boards are likely to be better guardians of a company’s future and its relationship with society. In my research with McKinsey & Co. for my most recent book, Connect, I found that the value at stake in this relationship is roughly 30% of a company’s profits. Protecting this value effectively represents a significant competitive advantage.

And acting on a lack of LGBT representation on the board identified through this process signals a commitment to inclusion throughout the company that can improve the working environment for current employees, attract the best new employees to the company, and boost performance. Research has shown that inclusive companies achieve abnormal returns of over 2% per year compared to competitors.

Getting board members to volunteer this information will not be easy. From my own experience, and from conversations with other senior business leaders, people at the top of companies are reluctant to come out because they believe that their private life is private and separate from their professional role. It was this belief that prevented me from coming out while I was at BP (BP). And it slowed Tim Cook’s coming out at Apple (AAPL) for a number of years.

This thinking is misguided. The case for privacy does not apply to business leaders in the same way it does for everyone else. Board members and very senior executives make a tacit agreement to have their lives scrutinized, so they should be ready to lead authentically when it comes to disclosing their sexuality as well.

Voluntary disclosure will require enormous courage from currently closeted board members and support from other LGBT leaders and straight allies. But, combined with mandatory reporting LGBT representation on boards, it would be an important step that would allow a company, and the public, to measure what for too long has gone unmeasured, and to begin to address an issue that may not otherwise have come to light.

Lord John Browne is the former CEO of BP.