Foundation Board Recruitment Practices Lagging, Report Finds

Foundation Board Recruitment Practices Lagging, Report Finds

Foundation boards lack racial/ethnic diversity in significant ways and, given current board recruitment practices, that is unlikely to change, a new report from BoardSource finds.

In an effort to better understand the particular dynamics of foundation boards, the report, Foundation Board Leadership: A Closer Look at Foundation Board Responses to Leading With Intent 2017 (34 pages, PDF), analyzed a subset of survey responses from a hundred and eleven foundation CEOs and thirty board chairs concerning their boards' leadership composition, culture, and practices. A follow-up to Boardsource's September 2017 report Leading With Intent: 2017 National Index of Nonprofit Board Practices (57 pages, PDF), which reported that 89 percent of foundation CEOs, 85 percent of board members, and 95 percent of board chairs were white, the new analysis found that 5 percent of executives of foundations with all-white boards were "extremely satisfied" with their board's racial/ethnic diversity, while 40 percent were "neither satisfied or dissatisfied" and 55 percent were "dissatisfied."

Funded by the Ford and Hewlett foundations, the study also found that while 66 percent of chief executives — including 79 percent at community foundations and 53 percent at private foundations — said racial/ethnic diversity was "important or greatly important" to advancing their foundation's mission, only 25 percent said their board prioritizes diversity when recruiting new board members. Indeed, 18 percent of the CEOs surveyed reported that they were both dissatisfied with the racial/ethnic diversity of their boards and that their boards placed low or no priority on diversity in board recruitment, while even among those who reported being "extremely dissatisfied" with the racial/ethnic diversity of their boards, only 25 percent said diversity was a high priority in board recruitment.

"Without the will for change and the commitment to act, foundation board diversity is unlikely to change," the report argues. "That said, we should not underestimate the power of internal and external change agents who can start a different conversation emphasizing the importance of board leadership that is positioned to lead authentically on diversity, inclusion, and equity."

The study highlights three elements that both CEOs and board chairs viewed as important to a board's perceived impact on organizational performance — providing guidance and support to the chief executive, understanding its roles and responsibilities, and being adaptable in the face of changes in the environment — with 76 percent of the CEOs who reported that their boards had a positive impact on the foundation's performance saying the board did a good job providing guidance and support, and 70 percent saying the board had a strong understanding of its roles and responsibilities.

In addition, the report found that while regular self-assessments are linked to stronger board performance, only 38 percent of foundation boards had conducted a self-assessment during the last three years. What's more, a significant percentage of foundations are opting out of recommended accountability and transparency practices — 76 percent do not have an annual audit process that includes a meeting with auditors without foundation staff present; 66 percent do not post financial statements to the foundation's website; 61 percent do not post their IRS Form 990; and 64 percent do not share information about their board practices and governance with the public.