Key Governance Report: Leading With Intent – DEI Provisions

Following up on our post on the recently published Leading With Intent: BoardSource Index of Nonprofit Board Practices, we explore some of the findings highlighted in BoardSource’s companion report Leading with Intent: Reviewing the State of Diversity, Equity, and Inclusion on Nonprofit Boards.

Key Findings

Boards may be getting slightly more diverse, but they are far from representing the communities they serve. While the study does not have a steady sample and therefore comparisons to past surveys are challenging, it is encouraging that the boards surveyed in 2019 included a higher percentage of people of color than in the previous study (22% versus 16% in 2017). That said, only 38 percent of executives felt that their boards represented the communities they serve, and 66 percent of executives expressed dissatisfaction with their boards’ racial and ethnic diversity. It is also noteworthy that only 29% of board chairs felt that their boards represented the communities they serve, and 45% of board chairs expressed dissatisfaction with the boards’ racial and ethnic diversity.

Board recruitment practices are not aligned with diversity goals. Demographic diversity is a high priority in recruitment for only a quarter of boards (26%); thirty percent of boards reported that it is “low” or “not a priority.” This would seem to indicate that – without greater emphasis and focus – boards are unlikely to become significantly more diverse. This is further affirmed by the finding that – even within the subset of chief executives that report that racial and ethnic diversity is important to their board’s external leadership and that they are dissatisfied with their board’s current racial and ethnic diversity – only half have aligned their board recruitment practices with their diversity goals.

Boards that include people of color are more likely to have adopted diversity, equity, and inclusion practices than boards that do not include people of color. High percentages of executives and board chairs agree that their boards have (to “some or a great extent”) engaged in the introductory aspects of diversity, equity, and inclusion work, including committing to understanding the diversity of the communities their organizations serve and discussing community needs in a way that acknowledges any disparities between different demographic groups among the people it serves. However, both executives and board chairs report significantly lower levels of engagement in areas that go beyond the initial phases of understanding and apply more directly to the organization’s mission, work, and communities they serve, such as:

Committing to raising its awareness and understanding of the relevance of racial inequity to the organization’s mission;Discussing the organization’s programmatic outcomes in a way that would surface meaningful variances based on demographics; andCommitting to addressing any gaps in organizational outcomes based on demographic categories.

Highlights of Board Composition Data*

* the Census and Gallup data were from my own simple web research

White/Caucasian/European – 87% of Chief Executives, 83% of Board Chairs, 78% of Board MembersAccording to the 2010 Census, about 75% of the U.S. population was “White alone” and 64% was “White alone – not Hispanic or Latino”.Hispanic/Latino/Latina/Latinx – 3% of Chief Executives, 5% of Board Chairs, 5% of Board MembersAccording to the 2010 Census, about 16% of the U.S. population was of Hispanic or Latino origin (53% of which also identified as White).Black/African American/African – 5% of Chief Executives, 6% of Board Chairs, 10% of Board MembersAccording to the 2010 Census, about 13% of the U.S. population was “Black or African American alone”.Asian/Asian American/Pacific Islander – 2% of Chief Executives, 2% of Board Chairs, 4% of Board MembersAccording to the 2010 Census, about 5% of the U.S. population was “Asian alone”.Females – 74% of Chief Executives, 53% of Board Chairs, 53% of Board MembersAccording to the 2010 Census, about 51% of the U.S. population was female.44 years old and younger – 20% of Chief Executives, 24% of Board Chairs, 30% of Board MembersAccording to the 2010 Census, about 40% of the U.S. population was in the 18-44 years old age group, and about 66% was younger than 45.With disability – 5% of Chief Executives, 3% of Board Chairs, 5% of Board MembersAccording to the 2010 Census, about 19% of the U.S. population had a disability.Heterosexual – 90% of Chief Executives, 94% of Board Chairs, 94% of Board MembersAccording to a 2019 Gallup poll, about 87% of the U.S. population identified as heterosexual.

62% of Chief Executives and 71% of Board Chairs believe their board’s composition does not reflect the demographics of the population served by their organization.

BoardSource Takeaways for Consideration

Chief executives appear to be more dissatisfied than board chairs regarding their boards’ lack of racial and ethnic diversity (by a margin of 66% vs. 45%).All-white boards may struggle to change.Some boards are reluctant to change well-established recruitment policies and practices.Boards are willing to change but don’t know where to find diverse candidates.

Perceptions of the Importance of the Board’s Racial and Ethnic Diversity

Boards generally believe that the board’s demographic composition matters. When asked how important the board’s diversity was to a set of board and organizational factors, Leading with Intent found that the majority of chief executives said that their board’s racial and ethnic diversity was “very important” to both its internal (within the boardroom) and external (in the community) leadership ….”

Despite the general finding reflected in the quote above, there were some surprises (to me) in the breakdown of factors. Consider, for example, the following data in response to the questions starting: How does the board’s current level of diversity impact the organization’s ability to …

Cultivate trust and confidence with the community servedChief Executives: 47% positively, 30% negativelyBoard Chairs 55% positively, 24% negativelyUnderstand how best to serve the communityChief Executives: 45% positively, 29% negativelyBoard Chairs 51% positively, 38% negativelyUnderstand the organization’s current operating environmentChief Executives: 44% positively, 26% negativelyBoard Chairs 48% positively, 20% negativelyPlan effectivelyChief Executives: 43% positively, 23% negativelyBoard Chairs 48% positively, 14% negativelyAttract and retain top talent for the staffChief Executives: 23% positively, 14% negativelyBoard Chairs 40% positively, 7% negatively

BoardSource Takeaways for Consideration

Boards that include leaders of color placed far greater emphasis on the importance of racial and ethnic diversity as it related to external ambassadorship.A board’s racial and ethnic diversity is much more important externally in their ambassadorial role versus internally in their in-boardroom leadership.

We wonder about some of the underlying assumptions that may have led to these results, such as:

* Do boards fully recognize the importance of racial and ethnic diversity in their boardroom deliberations and decision-making? Do they understand the impact that a lack of racial and ethnic diversity could have on their decision-making and strategic role?

* Are boards primarily viewing racial and ethnic diversity as a necessity for the organization’s reputation in the community, but seeing less value in racial and ethnic diversity as they relate to the various other roles and responsibilities of the board?

* Are boards [aw]are of the fact that racial and ethnic diversity is important to every aspect of the board’s roles and responsibilities?

Some Thoughts

In terms of racial and ethnic diversity, the board composition numbers reflect a significant gap, particularly for Latinx populations. But when looking at the Board Chair and Chief Executive numbers, the gaps are substantially worse. The numbers also hide the lack of racial and ethnic diversity in certain types of nonprofits (for example, in 2018, according to a study from the American Alliance of Museums, nearly half of all museum boards were 100% White – see A Racial Reckoning for Art Museums).

The lack of diversity in age groups is also a serious problem. It reflects a failure to include and gain the perspectives of younger adults, which impacts planning, operations, and fundraising. It’s also evidence of the sector’s failure to develop future leaders. Additional Resource: Welcoming the Next Generation of Board Leadership.

Despite these abysmal statistics, only 14% of Board Chairs believe that their board’s current level of diversity negatively impacts their ability to plan effectively. This is a failure of understanding both diversity and planning. Only 20% of Board Chairs (and 26% of Chief Executives) think that their board’s current level of diversity negatively impacts the organization’s ability to understand its current operating environment. Fail. And only 29% of Chief Executives think that their board’s current level of diversity negatively impacts the organization’s ability to understand how best to serve their community. Fail. We really need to teach this stuff in school.

The Leading with Intent: Reviewing the State of Diversity, Equity, and Inclusion on Nonprofit Boards report is very rich with information and insight, and we only touched the surface in this post. We strongly encourage you to review the full Leading with Intent report with your boards. This may be most impactful if combined with reading BoardSource CEO Anne Wallestad’s recent article: The Four Principles of Purpose-Driven Board Leadership (Stanford Social Innovation Review, Mar. 10, 2021).

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