By Josephine Victoria Yam, J.D., LLM.
2018 November 29
Read time: 2 minutes
At a conference last week, I met the Board Chair of a nonprofit organization dedicated to children diagnosed with chronic medical illnesses.
During our chat, she asked: "Can our nonprofit avail of B3’s free board matching services to recruit diverse board members?" “Certainly," I responded, "and what type of diversity is your board looking for?”
"All types of diversity, but especially age diversity” she admitted. “Can you imagine that our nonprofit serves children? And yet, none of our board members is below 60 years old!”
And there’s the rub. Hers is a comment we hear many times.
A nonprofit board is the collective brain trust of every nonprofit. It should be comprised of individuals who bring the whole spectrum of perspectives of the beneficiaries that the nonprofit serves. Otherwise, how will board decisions respond to the needs of beneficiaries if their voices are absent in the board room?
And yet, a vast number of nonprofit boards fail to reflect the rich diversity of perspectives of the beneficiaries they serve.
This diversity gap is a wasted opportunity.
Enter the 2018 Boardsource study entitled "The Impact of Diversity". The study surveyed nonprofit CEOs and Board Chairs on the question: "How is board diversity impacting your board's engagement?". The study measured board engagement in three ways: board member engagement, fundraising engagement, and advocacy engagement. Here are some interesting highlights from the study.
1. Board Member Engagement
Nonprofit boards with higher ratios of women have members who are more engaged, committed and involved. These board members actively take part in community building and outreach. They are engaged in oversight and governance of the nonprofit. And they serve on the nonprofit until the end of their term limits.
2. Fundraising Engagement
Nonprofit boards with higher ratios of women tirelessly fundraise for the nonprofit. These board members go out and meet with potential donors. They are not shy to ask others for money. And they are present in the nonprofit's fundraising events.
3. Advocacy Engagement
Nonprofit boards with higher ratios of women vigorously advocate for their nonprofits' causes. They reach out to policymakers. They keep an eye on regulatory landscape that may impact the nonprofit. And they inform policymakers on their nonprofits' advocacy activities.
What is it about board diversity that creates these positive outcomes?
Two words: Collaborative tension.
A diverse board respresenting a plethora of rich perspectives and mental models creates opportunities for “collaborative tension”, which is crucial for good governance.
Explained global firm Russell Reynolds Associates in its "Different Is Better: Why Diversity Matters in the Boardroom" report:
“In a room where everyone has different points of view and there is a greater opportunity for cross-pollination of ideas, there are fewer unspoken assumptions, less “group think” and a greater likelihood of innovation. This allows the board to ask the probing questions and tackle the challenging issues… which are at the center of good corporate governance.”
Diversity strengthens leadership. By casting a wider net in your board recruitment to incorporate the diversity and breadth of perspectives, your board becomes stronger and smarter.
As former U.S. President Woodrow Wilson candidly admitted:
“I not only use all the brains that I have but all that I can borrow”.
Many large corporations already provide their employees with diversity training. After all, they know that diversity and inclusion (D&I) is a source of competitive advantage. According to McKinsey, companies with strong D&I cultures perform better than their competitors. They're better in attracting top talent. Better in customer understanding. Better in employee engagement and retention.
But is diversity training enough to change employee behaviour?
"Diversity and inclusion has become a CEO-level issue around the world," observed Deloitte in its 2017 Global Human Capital Trends report. "The era of diversity as a 'check the box' initiative owned by HR is over. CEOs must take ownership and drive accountability among leaders at all levels to close the gap between what is said and actual impact".
So what happens when a CEO does not prioritize diversity and inclusion?
Let's take the story of global retailer H&M as an example.
A CEO of a large nonprofit asked: “Can B3 match our nonprofit board with business people who don’t come in thinking that nonprofits are inefficient"?
This is a question that many nonprofit CEOs ask us. Some nonprofit board directors apparently believe their business experiences alone can "fix a nonprofit’s inefficiencies”.
Why? This stems from the erroneous notion that businesses are more efficient than nonprofits.
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The Ontario Nonprofit Network (ONN) is the provincial network for the approximately 55,000 nonprofit organizations across Ontario. As a 7,000-strong provincial network, with a volunteer base of 300 sector leaders, ONN brings the diverse voices of the sector to government, funders and business to create and influence systemic change.
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The Sustainability Network is a national organization that works with environmental nonprofits to make them more effective and efficient. Their mission is to enrich environmental leaders and nonprofit organizations so that they can help us all achieve sustainability.
Founded in 1943, Vantage Point delivers learning opportunities focused on governance, leadership, planning and people engagement for new and seasoned sector leaders, board directors and managers, aimed at advancing not-for-profit leadership.
Women Get On Board is a leading member-based company that connects, promotes and empowers women to corporate boards. They do this through an engaged community of women and men in Canada committed to advancing gender diversity in the boardroom.