Modern boards must think about diversity beyond the conventional sense (race, age, etc.). Follow these tips to increase board diversity.
Embracing and cultivating diversity in the boardroom is not just about equity and inclusion, it’s about business and organizational leadership. Smart diversity gives boards a competitive advantage in their industry. According to research, diverse teams make better decisions up to 87% of the time.
Let’s discuss how to increase diversity within your board of directors.
What Is Board Diversity?
Board diversity is the distribution of different characteristics and attributes among directors. Diversity takes various forms and can be widely categorized into skills, expertise, experience, perspective, culture, and background. Having a well-rounded board composition equips boards with multiple perspectives, deep insights, and a wide knowledge base to drive the company’s goals forward.
Importance of Recruiting a Diverse Board
Boards need directors with a vast range of experiences to effectively assess risks, predict change, and discover opportunities to drive the organization toward success. Additionally, diverse perspectives help a board tackle challenges from different angles to make more informed decisions.
Board members with new skills, professional backgrounds, and connections share solid insights in the boardroom and expand the board’s knowledge base. This puts the board in a better position to deal with industry challenges.
In an interview of 18 directors, the majority said that increasing cognitive diversity on their board led to more informative dialogue and improved decision-making.
How to Increase Board Diversity
Increase board diversity with these 5 tips.
1. Conduct a Diversity Audit
A diversity audit reveals underrepresented attributes, skills, and competencies in the boardroom. Go beyond the conventional scope of financial expertise and professional experience, and include personal, experiential, and demographic attributes. The audit should show the board’s progress on diversity and new opportunities to optimize its composition.
Then, use this data to establish what a board needs in a new director. Additionally, check whether the board’s policies promote diversity, equity, and inclusion, and adjust your recruitment process accordingly.
2. Promote the Importance of Board Diversity
Diversity is crucial, but it becomes ineffective when board members’ perspectives aren’t regularly elicited or valued. To boost the effectiveness and promote the importance of diversity, boards need a more egalitarian culture that fosters diversity, equity, and inclusion. This elevates different voices, welcomes topics about diversity, and integrates contrasting perspectives, making board members feel their differences and attributes are incorporated into the board’s work.
Being an organization known for valuing and discussing diversity simplifies recruiting new board members, because you’ll easily attract qualified candidates with different professional backgrounds and experiences.
3. Utilize a Board Skills Matrix
Director skills are crucial when looking to create a more diverse board. Before deciding who to recruit, assess your current board directors’ skills. A board skills matrix helps you achieve that and build the right board to ensure the organization stays true to its goals.
A board skills matrix is a grid with two axes: The board of directors (or potential directors) are listed on one axis and their skills along the other. The two axes are crossed-checked, usually with an “X” or checkmark to map out skills present and absent on the board.
With a board skills matrix, you easily assess what your board needs and map a systematic path to recruiting the right members. When creating a board skills matrix, consider the board’s current and future diversity needs. But don’t forget to include the following skill sets/experiences:
- Network connections
- C-suite title
- Industry background
Boards should consider the above skill sets and add their own to build a skills matrix tailored to their needs. OnBoard provides a free board skills matrix template you can customize to suit your organization.
4. Reevaluate Succession Plans
In a Harvard Business Review survey, 10% of participants said their boards don’t have a succession plan, and one-third reported their board’s succession plans were ad hoc—created when a member is about to retire.
Boards need clear and proactive succession plans to ensure they are well-prepared to fill the empty seat when a member retires or steps down. An eleventh-hour succession plan prevents effective recruitment, which may fail to consider diversity appropriately.
After creating a proactive succession plan, communicated it to all board members. Regularly revisit succession plans and tailor them to changing needs.
5. Leverage Board Management Software
Features within a board portal platform, like skills tracking, enable boards to identify gaps within their current board composition and recruit accordingly. OnBoard’s purpose-built board management platform includes Skills Tracking, among other essential tools for modern board governance. OnBoard Skills Tracking helps boards:
- Manage skills tracking
- Identify skills gaps in their current boards
- Make informed decisions for new member recruitment or succession planning
- Save time and minimize complexity by having their board composition data stored in a central, secure location
Modern Boards Rely on Skills Tracking Software
A healthy board relies on the board’s composition—capacity of directors, member skills, and qualifications–to achieve its goals. Modern boards leverage skills tracking software to identify underrepresented skills.
In addition, a board portal platform like OnBoard helps boards hold effective meetings, collaborate in real-time, distribute reports, and store documents—all on a single, easy-to-access platform.
Help your board work faster and recruit smarter with OnBoard’s board portal platform. Request a free trial to get started.
About The Author
- Josh Palmer serves as OnBoard's Head of Content. An experienced content creator, his previous roles have spanned numerous industries including B2C and B2B home improvement, healthcare, and software-as-a-service (SaaS). An Indianapolis native and graduate of Indiana University, Palmer currently resides in Fishers, Ind.
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