Board Composition (Overview, Definition, and Examples)

Recruiting a Diverse Board

Identifying what diversity looks like is the first step toward building a more diverse board. Run an audit of your board’s composition and identify diversity gaps to identify where to focus.  Consider all types of diversity, from race, gender, and abilities to backgrounds, skills, and qualifications. Diversify your board with these tips.

Cast a Wide Net

According to PwC research, one of the biggest misconceptions in organizations is that there’s a shortage of qualified candidates to diversify board composition. To reach more candidates, one consider expanding recruitment efforts one or two levels below the C-suite.

In addition, many boards rely on their internal networks when finding new members. Go beyond this inner circle to explore untapped recruitment opportunities who will truly diversify your board and drive real change. 

Sources for finding qualified candidates include executive leadership programs, professional associations, local universities and colleges, and MBA programs. You can also use executive search firms if the organization’s budget allows it. 

Add a New Seat

Low board turnover hinders board diversity. A recent study revealed that about half of America’s largest publicly-traded organizations hadn’t changed their board composition within the previous year. 

Fortunately, there’s a simple way to solve this problem: A company can add a new board seat temporarily or permanently without waiting for a board member to reach their term limit or retire. 

Have Adequate Succession Planning

Most boards only begin examining succession planning when a member is about to retire. And even then, they are not always clear about the succession plans. According to a survey of board members, fewer than half of the participants (49%) said their board shares succession plans with all directors. About 10% said their board didn’t have a plan at all, and the rest said their board’s succession plans were impromptu. 

Last-minute succession planning hinders effective recruitment, which may hinder diversity efforts. Your board should have clear succession plans before they are needed. Then, it should regularly revise the plans to ensure they address changing requirements and priorities tied to diversity. Most importantly, the plans should be clear to all board members so they can voice concerns if diversity isn’t prioritized appropriately. 

Use a Board Skills Matrix

An effective board skills matrix maps out directors’ attributes and skills to help companies identify what they already have and are missing. It helps identify when a board composition needs a refresh. Most matrices list characteristics of directors in an Excel-like format. 

A board skills matrix covers various skill sets, values, and perspectives, including; 

• Professional rank
• Area of expertise
• Years of board service
• Demographic information

When recruiting, consider a mix of first-time seat holders and veteran directors to maintain a good balance in the board composition. Boards with long-time directors provide insights that can only be acquired through experience and can help the organization stay true to its goals. On the other hand, first-time directors who are not retired can diversify the board by providing knowledge to handle current trends.