New research finds that 92% of trustees are still pale, male, over 50 and above average income and education…
Achieving diversity is a perpetual challenge for charities. The latest research from Cass Business School and Cranfield Trust finds that 92% of trustees are still pale, male, over 50 and above average income and education – but how can charities overcome this?
In theory, every organisation needs to seek to increase or at least maintain the diversity of its board when recruiting trustees if it is to mirror both society and the demographic of the beneficiaries it serves. Yet despite there being much consensus regarding the business case for diversity, understanding how to bring about the changes desired is slow.
Although there has been some progress in relation to gender diversity, there is limited representation from young people, people with disabilities and members of minority or ethnic communities. According to ACEVO, 97% of trustee chairs are white and 7 out of ten are men. The Charity Commission estimates that only 0.5% of the trustee population is made up of 18-24 year olds. Over a quarter of charities also feel that their leadership team lacks sufficient diversity.
The problem is exacerbated by the fact that 81% of charities practise recruiting of trustees by word of mouth or personal recommendation. With charity governance increasingly under scrutiny, many charities are at risk of their board members being seen as disconnected, particularly from the realities faced by the beneficiaries of their services. If charities really want to facilitate a more just and equal world, it has to start within their own organisations.
Financial benefits of diversity
Evidence outlining the financial benefits of diversity for charities is limited but there is much available that sets out the rewards for private sector companies. McKinsey’s research, for example, shows that companies in the top quartile for racial and ethnic diversity and gender diversity are, respectively, 35% and 15% more likely to perform better than their national industry medians respectively.
Equally, it found that for every 10% increase in gender diversity, UK companies see an increase in EBIT (Earnings before Interest and Taxes) of 3.5%. Imagine what your organisation could achieve if its coffers were boosted by a similar amount.
Perspectives and experiences
In addition to direct financial benefits, a more diverse board will offer differing perspectives and experiences (essential in today’s rapidly changing world); it can increase public confidence and accountability; and can make a charity more attractive to funders (both statutory and trusts and foundations are increasingly pushing this agenda). It can also help avoid groupthink, something that can be a consequence of repeated appointments from candidates with very similar backgrounds.
However, none of this can be achieved without a radical rethink of the methods deployed to appoint new trustees. This should include less of a reliance on word-of-mouth and specialist job boards, which sometimes just compound the problem and maintain the status quo.
Due consideration also needs to be given to the training and guidance available to panel members. All organisations should attempt to ensure that applicants are not subject to discrimination on the grounds of sex, marital status, civil partnership status, trans-gender status, pregnancy, sexual orientation, race, religion or belief, disability and age. Decisions on recruitment and selection should be based on objective, role-related criteria.
The chair of the board should advise the recruitment panel to keep to topics that are relevant to the selection process, there should be a gender balance and wherever possible broader diversity. Panel members should have received appropriate training, and be aware of the issues around direct and indirect discrimination.
It can also be helpful to be reflective and ask questions of the organisation itself, examples might include:
- What is it about our work that is truly impactful?
- How inclusive are board discussions?
- What skills, connections, resources, and expertise do we have to offer a board member new to trusteeship?
- What are the expectations from the management of the charity?
- How important is socially interacting with other members?
Expanding the pool
More energy should be deployed in reaching those often hard-to-reach communities. This could be achieved through search, either in-house or through the means of specialist consultancies with a palpable track record in achieving diversity in its broadest possible terms or by advertising on platforms with either a broader potential reach such as LinkedIn or those that are specifically targeted at the demographic you are seeking to engage.
Other activities that can be helpful include the holding of an open day to enable interested parties to find out more about the inner workings of the charity and the role of governance; and active engagement with employers within the footprint of the charity, who increasingly view trusteeship as a learning and development opportunity.
This article was published online at Charity Financials: http://www.charityfinancials.com/charity-financials-insider/why-charities-must-do-more-to-promote-trustee-diversity-1739.html