Nonprofit Board Diversity Matters

I do not know exactly the ratio of women to men who sit on nonprofit boards.  Neither do I know exactly the ratio of people-of-color who sit on nonprofit boards.  From observing my nonprofit clients I would venture to say that women are better represented than people-of-color; however, depending a bit on the sector of the nonprofit, men often outnumber women.

So what?  Diversity matters and that diversity matters is brought home by this Wall Street Journal article that, while focused on gender and corporate boards, attempted to quanitfy how diversity matters:

Major companies with three or more female directors achieved significantly better financial results than those with none between 2004 and 2008, according to a 2011 study by Catalyst, a nonprofit research group. In general, they outperformed companies with zero women on boards by 84% for return on sales, 60% for return on invested capital and 46% for return on equity.

"A board with at least three women gains diverse viewpoints that can enhance results," says Debbie Soon, a Catalyst senior vice president.

This is a helpful lesson for governing in the coming year and , perhaps may stimulate similar research focused on woman & minoirty board representation in the nonprofit sector.

 

Comments

[Rick Cohen]

Hi Mike: The nonprofit sector is quite complex and multifaceted. One part of the sector seems just about impervious to the question of diversity--private foundations. My research consistently shows that foundation boards are incredibly white--whiter in fact than the boards of Fortune 100 and Fortune 500 corporations. And that's just on foundations that report their board composition numbers to the Council on Foundations. In the foundation case, I suspect the issue isn't one of enhancing results. It is a question of control, political control, what kinds of issues, what kinds of nonprofits get funded and what kinds don't. Efforts on diversity in foundations seem to always focus on program staff, not on trustees who are responsible for setting the policies and approving the grants.