The Power Of Diverse Boards: An Argument For Change

We have a lot of work to do. Most of us have known this for quite some time, but the tragedy of recent weeks highlighted just how far we have to go. The fight for diversity, equity, and inclusion is one that never stops. A clear and ongoing commitment is required to bring forth positive change, and it must begin at the top.

Boards of directors operate at the highest level of organizational leadership, each playing a key role in the development of philanthropic organizations’ long-range strategic vision, daily operations, and overall culture. 

Numerous studies prove diversity positively impacts a company’s financial performance. According to McKinsey & Company, companies that rank in the top quartile for ethnic diversity in management and board composition are 35 percent more likely to have financial returns above their respective national industry medians. 

Does the same hold true for philanthropy? Does diversity, equity, and inclusion matter for nonprofit organization boards? Consider its effects.  

Diversity Drives Organizational Performance

1. Diversity inspires innovation

A board that is diverse in ethnicity, gender, and ability drives innovative thought and pushes its members to be more open minded. This begins with the unique perspective, talent, and knowledge a board member brings to the table, which can push a board to be more innovative in its operations. Now more than ever, the social sector must develop a diverse portfolio of revenue streams. Leading-edge industry expertise ranging from entrepreneurship to operations to financial strategies is critical to forward-thinking oversight and planning. 

2. Diversity leads to creativity

Diverse boards operate at a higher level of creative problem solving. Those among us who adapt to physical disabilities encounter challenges on a daily, if not hourly, basis. Those of us forced to overcome systematic inequalities have had to adapt our entire lives. This ability to overcome challenges can translate to adaptive leadership, opening a world of possibilities to program execution and organizational management. 

3. Diversity leads to authenticity and network breadth

Current or past clients who serve as board members add a level of authenticity and credibility to inform program planning, serving as a “voice of experience.” An awareness of those they serve gives boards of directors the information necessary to develop and implement strategies based on reality. This understanding provides the context for proper resource allocation, effective and strategic action, and deepens the organization’s relevance and impact. In addition, a broadened network contributes to the identification of new staff and generation of new resources. The multitude of perspectives to inform decision making challenges the status quo – something that’s desperately needed in our country’s current state of turmoil. 

Inclusion Drives Action

Now take away all of the advantages generated from diversity. This is what happens without inclusion.

  • Imagine nonprofits that exist on one revenue stream, which eventually becomes threatened.
  • Imagine problem solving that is approached in a traditional method because “it has always been done that way.”
  • Imagine clients are only those we serve, not the voices to which we carefully listen. 
  • Imagine we recruit staff and donors who only look and act like us. 
  • Imagine logic models and outcomes are developed from only one point of view. 

The magic happens when differences not only collide, but are valued. The unique advantages diversity brings cannot come to fruition without inclusion. The perspective of all board members must be continuously sought and heard, and differences of opinion must be welcomed. 

Equity is the Result

Equity and systems change are the result of leaders fully embracing diversity and inclusion. In the absence of inclusion, we become comfortable in our silence. Without diversity of thought and perspective, our value system is compromised and systemic injustice persists.  

It is clear that diversity, equity, and inclusion matter on boards for all organizations, and especially nonprofits. To truly maximize effectiveness, as well as financial success, nonprofit boards must work consistently to ensure different viewpoints are heard and incorporated. Change doesn’t happen inherently or automatically. Boards must actively seek those who will bring new perspectives and challenge the status quo.

For those who currently serve on a nonprofit board, now is the time to act. Develop internal policies to strengthen your board’s diversity and begin to build the organizational leadership foundation required to identify and address change. 

If you’ve considered investing your time and talent with a nonprofit committee or board of directors, now is the time to connect with an organization that aligns with your passions and expertise. 

The success of any organization begins 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 prepared to speak up for change.

Authored by BoardBuild CEO Pamela Cannell and originally published June 2020 by Philanthropy News Digest:

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