By Donella Wilson And Derrick Coleman
Organizations must make diversity a priority to reach their full potential.
Nonprofit boards have significant influence and set the strategic direction for an organization. Therefore, a successful board─one that can innovate and adapt─requires a variety of skills, backgrounds, and experiences amongst its members. Gender, racial, and ethnic diversity are essential to effectively address societal challenges and inequities.
While the business case for board diversity has been documented, diversity is still lacking in many nonprofits. For an organization to govern and serve its constituents, it must find new ways to create more inclusive boards.
Board Diversity Roadblocks
According to a 2021 report by JUST Capital, only 30% of corporate board directors or director nominees are nonwhite. Historically, boards are composed of individuals, typically white men, who have significant professional achievements and the power to give a financial gift. Unfortunately, these homogeneous makeups can lead to conformity and a lack of innovation. To avoid such problems, boards should:
▪ Review board criteria. Boards have become microcosms of society, where financial means and opportunity outweigh on-the-job experience and technical expertise. Criteria for appointments should be reviewed to see if the criteria limits and/or excludes candidates of different backgrounds, achievements, or fiscal means.
▪ Remove affinity bias. Defined as ʻan unconscious bias where people connect with others of similar interest, experience and backgrounds,ʼ affinity bias perpetuates candidates who are from the same background, education and/or affiliations.
Ways To Create A More Inclusive Board
Boards cannot sit back and govern passively. They need to be fully engaged and willing to take calculated risks to be successful. Having a board that is diverse in terms of age, race, religion, gender, expertise, and experience provides a wide variety of perspectives. Such diversity leads to better decision-making.
Ways that nonprofits can address these issues to build better governing bodies include:
❶ Conduct board audits. The board itself should define the ideal composition of the board. Additionally, auditing allows an organization to take an honest look at its mission, a process that can reveal if the board’s makeup can effectively accomplish the mission. With the SEC’s passing of new listing rules submitted by NASDAQ, publicly traded corporations will be required to comply or disclose board diversity statistics. The Board Diversity Disclosure Rule takes effect in 2022 and requires listed companies to annually report statistics surrounding a board’s self-identifications, including gender, race, and LGBTQ+ orientation.
While these new regulations might not impact nonprofits, it is an indicator of where the world is trending. Performing an audit allows nonprofits to stay ahead and position themselves for future compliance and/or regulations.
❷ Start with successful onboarding. New board members should receive training and be engaged with the mission and their fellow board members from the start. It is important to determine individual skillsets and put these individuals to work on committees. That way, they can be utilized in a strategic and effective manner. It is also important to mentor committee members and leverage their strengths by providing both challenging and rewarding assignments.
❸ Create a pipeline to board membership. Board members need to plan for their own succession—as individuals and as a group. A young professional board or a leadership council can serve as a pipeline for future board members and advocates. Members can learn about the organization and its governance without the financial and fiduciary responsibilities of being a board member.
❹ Set term limits. Enacting board terms can also help create a pipeline for future members as well as create healthy checks and balances. A lack of term limits can lead to a concentration of power within a small group and potentially a less welcoming environment for new members. Establishing and enforcing term limits can foster diversity by creating healthy turnover.
❺ Recruit from diverse organizations. When looking for members, look outside traditional networks or bring in external support to help source candidates. Nonprofits can also partner with inclusion-oriented programs, such as the African American Board Leadership Institute (AABLI) and the Riordan Leadership Institute that help prepare diverse candidates to sit on boards. These are great examples of how organizations can bridge the gap in sourcing diverse candidates.
❻ Review board membership policies/requirements. Many nonprofits now have diversity, equity, inclusion, and accessibility (DEIA) policies underpinning their strategic plans, and a formal policy helps foster an intentional focus. Just as formal recruiting policies ensure that organizations attract, support, and retain a diverse workforce, a board policy can have a similar impact. To be effective, the policy should include information about the current board makeup, establish benchmarks and set goals to achieve desired outcomes. This will help keep the board accountable and measure progress. Boards should also consider appointing a member to lead these efforts or form a DEIA committee. As a governing body, a board’s position on DEIA issues will set the tone and have a larger impact throughout a nonprofit.
❼ Ensure the board is representative of the community it serves. Impactful boards understand the needs of the communities they serve and having a community board member helps achieve this (provided they are an important part of discussions and decisions). Staff members are well positioned to identify candidates since they tend to be tapped into the community. When communicating to staff, be specific and intentional about the kind of seat that needs to be filled and skillset that is required.
Making Diversity A Priority
For organizations to reach their potential, their boards must reflect (and understand) the communities they serve. Thus, nonprofits should be intentional about creating inclusive boards and go beyond their traditional networks to find new members.
Leveraging social media to publicize openings can help nonprofits cast a wider net. When safe to do so, hosting events is another way to engage prospects. This sends a message that an organization welcomes outside perspectives.
There is always room for improvement in terms of board inclusion. Evaluating board makeup, reviewing policies and procedures, and finding new avenues to source talent will not only make for better boards but also create high-performing organizations.