board meeting

Several years ago, California passed a law requiring that public company boards based in the state include at least one woman. This historic legislation was enacted to address the disparity of men versus women who comprise S&P 500 company board seats. At the time, only 20 percent were held by women. The law was representative of a national movement. The general public across the United States advocated for greater board diversity and diversity within C-suites. 

Last year, the SEC approved Nasdaq’s Board Diversity Rule, which requires companies listed on the U.S. exchange to: 

  • publicly disclose board-level diversity statistics using a standardized template 
  • have or explain why they do not have at least two diverse directors  

Today, four years after the landmark California law was adopted, the percent of board seats filled by women has increased by 10 percent. The question remains: Is this improvement due to a growing commitment to diversity based on an understanding of its many benefits, or is it rooted in the fear of public scrutiny? Does the impetus even matter if the outcome is positive? We believe that it does. 

This article will look at what a true commitment to board diversity means for an organization and how to approach board diversity for greatest impact. 

Laying the groundwork 

Tokenism is a symbolic effort to hire the required (or token) number of underrepresented people to comply with diversity standards. It is about looking diverse, rather than being diverse—and it is never the path to meaningful change. 

Are you approaching board diversity with a tokenism mindset? Ask the following questions as a first step in your diversity work. 

  • What is your why? Consider why you are seeking greater diversity. If compliance is number one, the outcomes will be superficial. However, if culture transformation, for example, is the main goal, board diversity will be a key factor in organization-wide progress. The purpose dictates the results. 
  • Do you want to change? When a board is comprised of people with diverse ideas, perspectives, experiences, and backgrounds, conflict will emerge. And conflict in this sense is positive. Conflict can reduce group think and drive real change. But first, your organization must be ready to embrace that change.  
  • Are you willing to get uncomfortable? To achieve true board diversity, you must reach new communities and find different people to join your governing body. This requires tapping into networks that are historically unconventional for your organization. 

After an organization addresses these guiding philosophical questions, it’s time to explore the how of board diversity.  

Doing the real work 

Diversifying a board is about mirroring the community that your organization exists to serve. Perhaps this is a certain geographic location (or several). Maybe it’s a population of people that shares common interests or needs. Identify the main audiences your organization serves and compare those personas to your board members to assess how well your board mirrors its community. 

Once you know where you are on your board diversity journey, you have a benchmark against which to measure progress. At this point, be transparent with staff and the community: If your board is not diverse, don’t pretend that it is. For example, don’t use stock imagery on your website to hide your lack of internal diversity. Instead, acknowledge that your organization is working on its diversity and explain how you plan to get there. 

Finally, allocate decision making to a diverse group of stakeholders. When identifying and selecting board candidates, involve the various personas you identified. To get the right mix of people at the table, you need input from similarly diverse individuals. 

Diverse leadership creates a better future  

When explaining why boards need to be diverse, Dr. Simran Jeet Singh says it best in this Harvard Business Review article: “An expanded view of diversity can help boards strengthen their governance, avail themselves of the opportunity to better meet their obligation to all stakeholders, to stay at the cutting edge of environmental, social, and governance (ESG) issues, and to build a company that is fit for the future, rather than reflective only of the past.” 

Are you ready to get serious about diversifying your board? Brighter Strategies helps organizations build empowered workforces through the pursuit of continuous improvement and best practices such as board diversity. We partner with mission-focused organizations to help them meet their goals. Contact us today to learn more. 

Nonprofit Governance – A Guide for Building a Strong Board

In this interactive workbook, Brighter Strategies teaches the basics of board governance, including board structure, members’ roles and expectations, and the responsibilities required for effective oversight.

Use this guide to first evaluate the current state of the board in your organization. Next, learn how to apply your organization’s unique culture and specialized resources to board governance. You will walk through the journey of building a strong board, from recruiting your board members and forming committees to conducting orientation and delegating tasks. This book is full of practical exercises and informative resources to help make effective governance a reality in your organization.

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Nonprofit Governance: A Guide for Building a Stronger Board ebook