Nonprofit Resource Connection Newsletter
First Quarter 2011
Board Diversity: Critical to Effective Board Governance
Kathy Grochow NRS, St. Cloud
The basic responsibilities of board members are to set the strategic direction of the organization, hold management accountable for progress toward that strategic vision and provide fiduciary oversight. Governance is really the mechanism that the Board uses to guide the work of the organization and it allows the board to be successful in designing the organization’s future. In many cases, the board must transform itself in order to transform the organization. Currently, there has never been a greater need for revitalizing the role of boards and establishing a new framework for board leadership.
As stated by Linda Crompton, CEO of BoardSource in her blog, "Transformative Governance is applying new ways of thinking to the principles of governance that have withstood the test of time and expanding the definition of governance to include the elements of leading an organization that is a piece of the whole rather than an end in itself."
To govern strategically, boards need to think, not plan, strategically. An organization’s strategy is influenced by new concepts, new ideas, and value propositions. "…Ideas, not brilliant plans, are usually the springboard for revolutionary strategies…", from Governance as Leadership written by Richard Chait, William Ryan, & Barbara Taylor. Board composition is critical as you look at strategy and the strategic direction of the organization. In this new environment, any board that is homogenous in an ethnic, gender, or generational sense will be at an enormous disadvantage.
To govern in the strategic mode, the board’s structure must be adapted to strategic priorities, not vice versa. Furthermore, to have good strategic discussions and to tap into generative thinking, the board needs to look at challenges and opportunities from various perspectives. Boards which view things from a single lens (or who are homogeneous) risk instant irrelevance.
Another benefit in board diversity is the recruitment of younger generations to bring new perspectives, ideas, and approaches as it relates to technology and social networking. Organizations that do not utilize the social networks, web-based tools, and internet connections may become obsolete and side-lined.
Effectively diverse boards will be those whose members effectively represent the organization’s constituency. Meaningful representation must be a priority over geographic diversity and both are important in creating the image of "fairness" in a public organization. This requires a commitment to the benefits of diversity. A diverse board ultimately should bring a higher level of critical analysis because of diverse perspectives and varied approaches to challenges and opportunities. In recruiting individuals to serve as representatives, boards must look beyond demographic characteristics and examine the unique contribution each potential board member can bring to the organization.