A new pathbreaking study demonstrates that companies can advance diversity and inclusion, develop human capital for innovation, and foster economic development and achieve the UN Sustainable Development Goals by engaging their employees on nonprofit boards. Here's the scoop.
I served as lead author on the November 2017 Nonprofit Board Leadership Study, which measures and documents the value of programs that train and match employees with nonprofit boards. This work can help companies achieve their most vital strategic goals.
The results of this study are particularly compelling at a time when investors and the public express concerns about the failure of business leadership to maximize opportunities for innovation, economic development, diversity and inclusion. Investors expect companies to be accountable for and responsible in addressing human rights, climate change, ecosystems loss, gender equity, poverty, education and healthcare.
Evidence shows that companies will profit and grow value by finding innovative solutions to global challenges. To make this a reality, companies need more effective pathways to develop leaders who can maximize business opportunities and potential.
A note on the data: 957 employees from five multinational corporations completed an extensive survey (a 33 percent response rate). Follow-up interviews were conducted with 34 respondents. A total of 401 of the 957 respondents serve on nonprofit boards; 556 respondents never served on boards, but of these, 96 percent expressed interest in doing so.
The group of people interested in boards come from more diverse backgrounds than the group already serving. There are more Millennials (53 percent compared to 28 percent who serve); more women (51 percent compared to 41 percent who serve); and more people from diverse racial and ethnic backgrounds (33 percent compared to 19 percent who serve). These results demonstrate the opportunity for companies to advance employees from more diverse backgrounds. The added benefit is that companies would also be infusing boards with greater diversity, an important goal of nonprofits.
Three Key Findings
1. Advancing diversity and inclusion. Business people who serve on nonprofit boards gain appreciation and understanding of people from backgrounds that are different from their own. This benefits companies since studies indicate that diversity and inclusion increase profitability. Additionally, companies have a significant reservoir of people from diverse backgrounds who would like to serve on boards, thus providing opportunities for leadership development.
2. Developing human capital for innovation. Business people who serve on nonprofit boards confront challenges that stimulate their leadership, creativity, and innovation. Additionally, they improve skills that enhance their performance at work, including strategic planning, decision-making, listening, collaborating, and partnerships. This experience and expertise will help their companies grow value.
3. Fostering economic development and achieving the UN SDGs. Business people who serve on boards strengthen communities where their company’s employees and customers live and work. Board engagement also helps to advance the United Nations Sustainable Development Goals (SDGs), including quality education, reduced inequalities, sustainable cities and communities, and partnerships for the goals.
Recommendations: Train. Match. Support.
Companies that seek to enhance and expand their nonprofit board programs, or establish a new program, need to take the following three steps:
1. Train: To optimize the benefits of board service to the company, individuals, and nonprofits, companies should offer a board training program for employees interested in serving. Not only is this a best practice, but the survey shows that people interested in boards would be more likely to serve if there were training that addressed responsibilities and expectations.
2. Match: Companies can help ensure that their employees have productive and rewarding board experiences—that also reflect well on the company—by assisting employees in finding the right nonprofit match. Additionally, the data show that when people are matched thoughtfully and purposefully, they are more likely to rise to board leadership positions. By providing highly effective board-matching services, companies will make it more likely that people will participate, and help maximize the benefits to the company, employees, and the nonprofits where they serve.
3. Support: Best practices indicate that board experiences will be more productive and rewarding for employees, their companies, and the nonprofit where they serve if companies assist their employees’ efforts. Additionally, the study data show that employers who support their employees who serve on nonprofit boards will make progress in achieving their goals for recruiting and retaining the best employees.
Employees report that the most meaningful company support is allowing them the flexibility with time to attend meetings; financial contributions to the nonprofits where they serve; recognition for their service; and ongoing coaching and training. Furthermore, by providing ongoing coaching and training support services, companies can maximize the leadership development value of board service, enhancing the win-win-win for their employees, the company, and the nonprofit and community.
By encouraging and supporting board service among their employees, companies can grow shareholder value by optimizing progress in advancing diversity and inclusion; developing human capital for innovation; and fostering economic development and achieving the UN SDGs.
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This study was conducted and authored by Alice Korngold, and sponsored by American Express, Dow Chemical, HP, Johnson Controls, PIMCO, Symantec, with support from the World Environment Center and Datamaran.
Find the full study at betterworldleadership.com.