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August 29, 2023 - admin

Taking Board Diversity to the Next Level

While it's encouraging that boards are increasingly focusing on addressing issues with respect to gender, ethnicity and diversity in the boardroom, a lot of boards are struggling to realize their full potential. Boards who treat the hiring of diverse directors as a "check box" exercise may end up with a demographically diverse board, but a lack of cognitive diversity that could significantly reduce board effectiveness.

If the right diversity is brought to a board and the results are transformative. If women are represented on a board, their views on topics like merchandising and marketing are able to be incorporated on the discussions. The result is an improved understanding of the customer's requirements, which can increase sales and profits.

Diversity can also improve the company's environment. A board that is diverse is more aware of issues like discrimination in the workplace and sexual harassment and better equipped to anticipate changes in attitudes of employees regarding equal pay and corporate practices.

If a board wants to take its diversity efforts to the next level, a great first step is considering what it should look like in the coming years and how it will find and find candidates with the appropriate skills, experience, knowledge and contacts to make it that way. To accomplish this, the board can perform a self-assessment on its current composition. It can also make use of resources such as Michigan Nonprofit Association’s board diversity tool to facilitate open discussions between board members as well as key stakeholders on what it looks for in terms of diversity.

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