Originally written by Leigh Neys, former SDSU Extension Community Vitality Field Specialist.
A study of 3000 of the leading publicly traded U.S. companies showed that only 12.5% of board directors were from underrepresented ethnic and racial groups. Data suggests that most directors are interested in diversity, but it does not always transfer to action.
Obstacles to Board Diversity
According to the Harvard Business Review, these are the major obstacles to increasing board diversity:
- Low Turnover: Boards generally have very low turnover. Lengthy board terms and commitment to the role means there is limited opportunity to appoint new board members. One way to resolve this issue is to add new board member seats, either temporarily or permanently.
- Inertia: Policies supporting diversity can be in place for boards, but acting on them is a different story. Organization stakeholders must demand that board diversity is not optional and prompt actions should be taken. Boards should not ignore those voices and take their members seriously.
- Limited Candidate Pools: There is not a lack of qualified candidates, there is simply a lack of effort of identifying appropriate candidates. Boards should also consider candidates with diverse backgrounds of experience.
- Inadequate Succession Planning: Identify and formalize board succession plans before they’re necessary. By including board members in the planning process, it supports transparency and understanding in the future of the organization.
Building Effective Boards
Given the challenges, what can boards do to increase diverse membership? BoardSource, the leading nonprofit board leadership research organization, suggests that boards are more effective when they are:
- Diverse: Board members are a reflection of an organization’s values and beliefs about who should be entrusted with its most important decisions. Organizations can be stronger with a more-diverse range of leaders and the diversity of their viewpoints and life experiences.
- Inclusive: Boards are effective when there is a culture of trust, candor and respect, all of which are not possible without inclusion. Boards that embrace inclusion welcome and celebrate differences, ensure that all members are engaged and invested and distribute power and responsibility for the organization’s work.
- Equity-Focused: Boards that are aware of how systemic inequities have affected society and those the organization serves allow themselves to create opportunities to deepen the organization’s impact, relevance and advancement of the public good.
If you’re ready to strengthen your board, South Dakota State University (SDSU) Extension can provide the training you need to be successful. Through the “Strengthening Board” program, SDSU Extension offers an eight-module specialized training program, with interactive workshops. Find out more by contacting Leigh Neys at 605-626-2870 or leigh.neys@sdstate.edu.
References
- Diversity, Inclusion, and Equity, BoardSource.
- You Say You Want a More Diverse Board. Here’s How to Make It Happen, Harvard Business Review.
- Corporate Board Diversity: Moving Beyond Lip Service, SHRM.
