The composition of a board is the mix that a board chooses to govern an company. This includes the ratio of inside directors and outside directors and the proportion of women, men and minorities, as well as whether board members come from different generations. It also examines the level of expertise on management issues and governance matters including fundraising and legal risk.
Diversity is an essential element in a healthy board composition. Many boards are looking for ways to increase diversity in their membership. It is possible to begin by conducting an audit of their current board members to discover diversity gaps and prioritize the areas where recruitment efforts should be directed. Diversity should be considered in all aspects including race and gender as well as education and age the skills and experiences.
A matrix of the needs of the board will help boards understand the type of people they need on their board. A matrix is a grid similar to Excel that lists the qualities of board directors and the skills needed to perform their responsibilities. This information allows the committee to make a list of possible nominees and rank them according to how they meet the criteria.
A board should be able to balance the interests of shareholders and the management team. This typically means that the board comprises an assortment of inside and outside directors, and that the inside directors have experience with managing businesses or nonprofits. Boards also have a chairperson who will oversee the work of the board as well as the committees.