Dear NPQ Research Partner: What do you want to know about nonprofit boards?
Last year, as you may remember, NPQ covered covered the findings of BoardSource’s profile of America’s nonprofit boards. The findings were enormously revealing, focused as they were in part on issues of diversity. As BoardSource prepares for its next national board survey, they want you to help them decide the questions on which to focus. They will share their results with NPQ, of course, and we will share them with you, but we need you to participate to make sure the questions they ask are relevant to you. Please take this short survey, and then come back to “Is Your Board Normal?” to read through last year’s findings—if you have not already done so.
We do caution that this data is self-reported and therefore prone to subjectivity—and that subjectivity, by the way, comes from a place that is older, whiter, and more male than we all wish it were. Still, the information gives us a backdrop of impressions that can help guide future thinking and action on nonprofit boards.
The 2014 BoardSource Governance Index is based on responses from 878 nonprofit CEOs and 246 board chairs. In some ways, the fact that the respondents are by definition people who have been in touch with BoardSource and therefore have evinced some interest in good governance practice makes the Index not entirely representative. But BoardSource’s Vernetta Walker says that previous research suggests that the findings are still representative of the larger field.
Is your board “normal”?
According to the 2014 BoardSource Governance Index, is your board out of step with the norm? In some cases, these norms may reflect good standards of practice; in others, not so much.
Against the findings of the 2014 Governance Index, your board is in a very small minority if:
- You pay board members an honorarium (98% do not)
- Your CEO is a voting member of the board (88% are not)
- You do not have director’s and officers’ insurance (96% do)
- You do not get an annual financial audit (89% do)
- You don’t have a whistleblower policy (88% do)
- You don’t have a document retention and destruction policy (86% do)
- You do not have a written conflict of interest policy (97% do)
- You distribute the Form 990 to the board before filing (85% do)
These practices are generally recommended as components of good board governance, although when it comes to number 4, some groups are small enough to be able to replace the audit with financial statements—and, frankly, some still question the real need for D&O insurance. But you are also in a small minority if:
- You do not have a white board chair (90% are white)
- You do not have a white executive (89% are white)
- You have a board chair who is 40 years old or under (91% are over 40)
- You have an executive director who is 40 years old or under (94% are over 40)
If BoardSource’s respondents are indeed relatively representative, these last four points indicate a lack of diversity in leadership in the sector overall. It’s this lack of diversity in leadership (and a few related issues) that NPQ will focus on in this short review of some of the findings.
First, it is important to recognize that boards have shrunk. This trend isn’t new; according to this index, over the 20 years between 1994 and 2014, board sizes have diminished by almost 20%, from an average of 19 members in 1994, to 17 members in 2004, to 15.3 members in 2014. While there are still some large boards, more than 80% of boards have fewer than 20 members.
The thought that boards must be packed with influential connectors seems to be going the way of the dodo, at least for many organizations. This fits well with the idea that boards should know how to interact effectively with larger systems of governance and support. “Interacting effectively” in these times means that board members are connected enough to the organization and its stakeholder environment to ensure proper communication with stakeholders. Board members should be capable of listening with an educated ear for the tremors and trends in the organization’s environment. A lack of diversity on the board interferes with the capacity to accurately “listen.”
Because the data here on the ages of leadership were so striking, we asked staff at the Young Nonprofit Professionals Network (YNPN) about the implications. Trish Tchume, YNPN’s national director, took the following stand:
The case for diversity and inclusion tends to focus on “reflecting the communities we serve.” While this is a strong reason in and of itself to work towards greater inclusion on boards, there is a much more straightforward reason to seek diversity: Our visions for a change are far too complex and the possible solutions to address these challenges are far too vast to rely on a narrow set of people to bring them to bear on our organizations.
Racial and ethnic diversity on boards has progressed very slowly
While there has been progress in racial and ethnic diversity on boards, it has been slow. As noted above, 80% of board members are white. This compares with 91% as reported ten years ago in the 2004 Governance Index, but the report makes a useful distinction between diversity and developing a culture of real inclusion.
Board members are as old or older than they were twenty years ago
According to the Governance Index, boards appear to have stagnated on building young membership, or even become less inclusive of youth over the past twenty years. In 1994, more than half of board members were reported in the Governance Index as being between 30 and 49 years old. The 2014 index does not use the same age spans, so it is difficult to compare exactly, but in 2014, 84% of board members are reported to be older than 40. In other words, only 16% of board members are younger than 40.
While the 2014 index does suggest that board members under 40 increased from 14% to 17% between 2010 and 2014, the proportion of board members under 40 in 1996 was higher than this year at 19%. Thus, little movement is apparent on this front, and combined with the advanced ages of CEOs and leadership (as shown in points 11 and 12 above), this may spell problems in terms of nonprofit resonance and relevance i