Study Finds Corporate Board Diversity Stagnant: Are Nonprofits Similar?
According to a national survey, Fortune 500 companies have made minimal gains in boardroom diversity in recent years. Nonprofit boards, while similar in their minority makeup, are including more women.
More than 70 percent of the board members of Fortune 500 companies are white and male, according to a new study by the Alliance for Board Diversity. This is a small change from the approximately 75 percent of Caucaisan male board members that a 2010 version of the study revealed.
The report, “Missing Pieces: Women and Minorities on Fortune 500 Boards” [PDF], also found that women and minorities are underrepresented in board leadership positions. For example, 93 percent of board chairs last year were Caucasian men, while 4 percent were minority men, roughly 3 percent were Caucasian women, and minority women made up less than 1 percent.
As in the corporate world, gains in minority representation on nonprofit boards have been small over the last couple of decades, said Vernetta Walker, vice president of consulting and training at BoardSource, a nonprofit organization that works with other nonprofits to develop governance strategies.
“What we have seen over the last 20 years is that it hasn’t changed a lot,” Walker said of minority inclusion. “About 20 years ago [nonprofit boards] were 86 percent Caucasian, and in our 2012 Nonprofit Governance Index, that number dropped to about 82 percent.” Still, nonprofits do better than the Fortune 500, where 87 percent of board members are white.
Thirty percent of the roughly 1,300 nonprofit CEOs surveyed by BoardSource also reported that 100 percent of their board members were white.
Gender diversity within nonprofit boards is considerably better than in the corporate sector. The Nonprofit Governance Index found that 45 percent of nonprofit board members were women compared to the roughly 17 percent in Fortune 500 boards.
A lack of diversity among volunteer leadership presents many disadvantages for nonprofits, Walker said, but one of the primary issues is a missed opportunity for organziations to better serve their missions.
“You have diverse membership,” she said. “You need to be able to relate to your stakeholders, and you want to make sure that you have a variety of voices represented at the decision-making table. If you’re not ensuring that your leadership is as diverse and inclusive as those that you’re serving, then you have to ask, ‘Are you missing an opportunity? Are you truly representing those who you say you are?’”
Walker said organizations can take several steps to create more diversity in the boardroom, but first they should focus on communication.
“Step one, we have to do a better job communicating and having the conversations that go deeper than the surface level to find out what are our barriers [to inclusion] are and how we connect diversity and inclusion to our mission.”
What are some ways that your organization has enhanced board diversity? Share your story in the comments below.