It’s encouraging to see boards more focused on gender and ethnicity as well as diversity, but many of them are struggling to fulfill their potential. Boards who treat the hiring of diverse directors as an “check box” exercise may end having a diverse demographic board, but one lacking cognitive diversity, which can significantly impact the effectiveness of boards.

If diversity is brought into a board in the right manner, the results can be transformative. For example, when women are represented on the board and their perspectives on subjects like marketing or merchandising are brought into discussions which can result in an improved understanding of the customer and their needs that can increase sales and profits.

Diversity can also enhance the company’s environment. A board with a diverse demographic can be more aware of issues like workplace bias and sexual harassment and better equipped to anticipate changes in employee attitudes about equal pay and workplace practices.

If a board is looking to take its diversity efforts to the next level, the best starting point is looking at what it might be like in the near future and how it will identify and select people with the right skills, experience, knowledge and connections to make it that way. To this end it could consider conducting an assessment of its own composition and utilizing resources such as Michigan Nonprofit Association’s board diversity tool to spark candid conversations among board members and important stakeholders about what the board looks for in terms of diversity.