What a Difference Three Years Makes

February 14th, 2013 | By

The state of the economy was remarkably different the last time NACD issued a governance survey dedicated to nonprofit organizations. In 2009, companies were just starting to stage a recovery from the financial crisis, and action plans were in the formative stages. At that point, survey respondents indicated the areas of most critical importance to their board were “board leadership,” “ethics and social responsibility,” and “board effectiveness.”

Fast forward three years to the 2012–2013 NACD Nonprofit Governance Survey, which shows that nonprofit boards have altered structures to meet the economic climate. Across the board, nonprofits have shifted focus to areas directly related to performance and strategy. Today, survey respondents indicate the priority governance issues are those that drive results: “strategic planning and oversight,” “fundraising,” and “financial oversight/internal controls.”

In addition to a more performance-driven outlook, nonprofit organizations have also increased the number of diverse directors present in the boardroom. According to NACD’s 2012 Blue Ribbon Commission on the Diverse Board, this development is a logical step, as boardroom diversity is a business issue: a means to competitiveness. Nonprofits are therefore more than competitive—female representation is ubiquitous with 97.7 percent of respondents reporting at least one female director on their board. The percentage of boards with at least one minority director has increased nearly 20 percent since 2009 to 76.4 percent.

Nonprofit organizations are ahead of their public and private company peers with respect to boardroom diversity. For public companies, diversity is a focus of pension funds and other institutions, as noted in last week’s NACD Directors Daily. Groups such as the Thirty Percent Coalition are urging Russell 1000 companies to increase gender equality on boards specifically—setting a goal that 30 percent of board seats are held by women by 2015. To meet this, U.S. public companies would need to work fast—current reports estimate that just 12 to 16 percent of board seats are currently held by women. Furthermore, according to NACD’s 2012–2013 Public Company Governance Survey, 27.4 percent of boards have zero female directors.

For more information about the 2012–2013 NACD Nonprofit Governance Survey, visit NACD’s bookstore.

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