“We cannot find any suitable candidates” or “the candidates we would like are already overcommitted” seem to be familiar statements from board chairs or nomination committees when questioned on the levels or lack of diversity on their boards. Reports such as the Board Monitor by Heidrick & Struggles or Leading with Intent by BoardSource continue to show that approximately 80% of US board seats, both in the private and in the non-profit sector, are held by white people. While there is almost gender parity on US non-profit boards the same cannot be said of private company boards where the number dwindles to 32% as in the case of S&P 500 companies. Board of directors claiming that there don’t seem to be enough qualified or available candidates are wrong; transparency on who gets appointed to a board or how remains one of the greatest hurdles for diverse and willing potential board members.
Knowledge of board seat vacancies remains one of the biggest barriers, only 20% of US boards publish their board service opportunities and less than 5% use an executive search firm to assist them with the board recruitment process. The numbers do not look any better on the other side of the Atlantic. In England and Wales according to the Charity Commission, only 10% of charitable organizations make their board vacancies public, yet, according to the Charity Commission there are approximately 100.000 vacant trustee or board seats! One barrier, especially for US non-profits may be the expectation of board members to give or get financial resources given that most younger professionals are burdened with repayments of college loans or do not yet have the professional networks to open doors. US non-profit boards may have to rethink their business model if they want to be truly inclusive based on socioeconomic & age diversity. Demographics are changing rapidly in the United States and already 44.2% of Millennials, born between 1982 and 2000, belong to a minority race or ethnic group according to the US Census Bureau. This number is even higher with Gen Z, born between 2001 and 2013, of which 48% identify as non-white and are on track to become the most educated generation yet (Pew Center). Similarly, the demographic change in the UK is undeniable, yet a difference is that most boards in the UK do not expect financial giving. Gen Z and Millenials, even with higher student loans to repay due to an increase in university fees are far off in the amount of debt to be repaid for their education compared to their US counterparts. Yet, we observe even less diversity on boards in England and Wales
So what needs to happen?
Organizations must take steps today to be able to compete in the fight for talent acquisition and talent retention and prepare for the upcoming professional workforces to expect to see leadership levels reflecting their own identities. Organizations will do well to implement the following actions to become more intentional about their board practice and diversity.
Firstly, conduct a board and competency audit on a regular basis to capture the diversity presence or absence, board performance, as well as its effectiveness.
Secondly, boards will do well in adopting a more transparent and equitable recruitment & succession process as well as develop inclusive onboarding practices for new or first-time board members.
Last but not least, organizations who want to become more aware about best board practices, their board diversity, recruitment and onboarding are can reach out to us for support at info@designation.one.
We are here to listen and help!