The power of diverse boards: an argument for change

The power of diverse boards: an argument for change

We have a lot of work to do. Most of us have known this for some time, but the events of the last few weeks highlight just how much work remains to be done. The fight for diversity, equity, and inclusion never ends, and a clear and ongoing commitment to all three is needed if we are to create positive change. That commitment must start at the top.

Boards of directors operate at the highest level of organizational leadership, with each director expected to play a role in the development of the organization's strategic vision, operations, and overall culture. Numerous studies have shown that diversity positively impacts a company's financial performance. Indeed, a McKinsey & Company study found that firms in the top quartile for ethnic diversity in management and board composition are 35 percent more likely to earn financial returns above their respective national industry median.

Is the same true for the social sector? Is it important for nonprofit boards to embrace and model diversity, equity, and inclusion? The answer, unequivocally, is yes, and here's why:

Diversity drives organizational performance

Diversity inspires innovation. A board that is diverse in terms of ethnicity, gender, and skill sets is more likely to generate innovation and push all its members to be more creative and open-minded. Today more than ever, social sector organizations need to develop multiple revenue streams, and leading-edge expertise in areas ranging from strategy to financial planning to operations is critical to a board's ability to conduct effective oversight.

Diversity catalyzes creativity. Diverse boards tend to be better at creative problem solving. Those who have had to adapt to physical disabilities encounter challenges on a daily, if not hourly, basis, while those subjected to systematic racism have had to adapt their entire lives. The ability to overcome challenges often translates to adaptive leadership, opening a world of possibilities in terms of program execution and organizational management.

Diversity fosters network breadth. Current or past clients who serve as board members add an element of authenticity and credibility to board deliberations and can serve as a "voice of experience" that informs and improves program planning. A greater awareness of who is actually being served gives boards information they need to develop strategies grounded in real-world facts. Such an understanding also provides context for proper resource allocation and effective strategic action, while helping to deepen an organization's relevance and impact.

Inclusion drives action

Let's try a thought experiment: take away all the benefits created by more diverse boards and imagine what the sector would look like:

  • too many nonprofits relying on a single, precarious revenue stream;
  • approaches to problem solving that are never improved on because "it has always been done that way";
  • clients who are viewed as beneficiaries rather than as equal partners in collective change efforts;
  • recruitment of staff and donors from among those who look and think like us; and
  • logic models and outcomes metrics informed by a single point of view.

Something magical and important happens when differences not only are not dismissed but are valued. But the benefits that diversity brings to a board are unlikely to be realized without an equal focus on inclusion. The perspective of all board members must be continuously sought and heard, and differences of opinion should always be welcomed.

Equity is the result

Equity and systems change are the outcomes of leaders fully embracing diversity and inclusion. In the absence of inclusion, it is too easy to become comfortable in our silence. Without diversity of thought and perspective, our value systems are compromised and systemic injustice goes unchallenged.

It is clear that board diversity, equity, and inclusion matter for all organizations, and especially so for nonprofits. To truly maximize a nonprofit's effectiveness, as well as its financial success, nonprofit boards must work diligently to ensure that different viewpoints are heard and incorporated. Change doesn't happen automatically or overnight. Boards must actively seek out those who can bring new perspectives to the table and challenge the status quo.

For those who currently serve on a nonprofit board, now is the time to act. Speak to your colleagues about steps the board can take to develop internal policies aimed at strengthening its diversity and begin to build a foundation for organizational leadership that supports change.

Similarly, if you've ever considered lending your time and talent to a nonprofit, now is the time to connect with one that is aligned with your passion and expertise. In these challenging, uncertain times, nonprofits are looking for all the expertise they can get their hands on.

The success of any organization starts at the top. Boards that want to maximize their effectiveness and performance must include socially and professionally diverse individuals who are committed to doing the work and are prepared to speak up and act for change. Good luck!

Pam Cannell is CEO of BoardBuild and has dedicated her entire career to nonprofit leadership and board governance.