DEI as a Fiduciary Responsibility

DEI as a Fiduciary Responsibility

When you first stepped into your role at work, did you understand your new job’s role and responsibilities? 

Well, of course you did. 

Almost certainly you had a clearly written job description to guide you in your work.  It would be tough for a new executive or employee to be successful otherwise, wouldn’t it? To perform a job well, we need to understand what we are expected to do; the role we are to perform; our area of responsibilities; and what strong performance will look like.

That’s obvious.

Yet. . . it never ceases to amaze me that so many nonprofit board members step into their new governance role without that very same expectation of clarity and readiness for the job they are expected to do.  The vast majority of new nonprofit board members receive no governance training at all. 

In my view that is governance malpractice.  In fact, BoardSource research found that a nonprofit board that doesn’t understand its role and responsibilities is – get this – 34 times more likely to cause harm to their organization as compared to boards that do.  

Every nonprofit board member should be aware of three points as they begin to serve an organization and its mission.  If one or more of these feels unfamiliar to you or your fellow board members, governance training is probably in order.  

The Three Legal Duties

The moment you are elected to a nonprofit’s governing board, three legal duties attach to you: The Duties of Care, Obedience, and Loyalty.  Does your board understand and comply with each one?  Failing to do so could cause harm to both you and your organization.   

Legal Duties of Board Members

Second, there are four core roles every board member plays.  Governing boards are charged with:

1.  Creating a strategic framework for the organization to operate within;
2.  Driving human and financial resources into the organization;
3.  Leveraging the collective professionals skills of board members to serve as          guardians of functional areas of excellence for the organization; and
4.  Providing the fiduciary oversight of the work
4 Categories of Board Responsibility

There is a much to share about each one of these areas of responsibility, but a few valuable words on the board's fiduciary oversight role.

As a fiduciary, you hold a legal and ethical relationship of trust with the community your organization serves. You are entrusted with the organization and, as such, are charged with ensuring effective leadership, the protection of financial assets, long-term sustainability, and compliance with laws and ethics.  

That sets up my final point. 

If your board is not actively engaged in the critical and very often challenging work of championing diversity, equity and inclusion (DEI) at your organization, you're falling short of your fiduciary oversight role.

When I have made this point, some very smart people have pushed back, arguing that championing DEI as a board member is better fit with the strategic responsibility of board service rather than the fiduciary role.  I don’t think so. 

In the strategy shaping role, a board will study the operating landscape, engage in thoughtful conversation, and then make well-informed bets on the best strategic priorities to pursue, in an always resource-constrained environment, in order to get closer to the vision – that inspiring description of the world the organization imagines in the future.  Strategy-shaping is choice-making.  

But championing DEI at your organization is not a choice today – it is an imperative.  Every stakeholder group – the community you serve, your staff, your funders, your partners, your elected officials, your volunteers – are expecting you to center those values in the execution of the work.  To cast a blind eye to the vital importance of a diverse board and staff; to fail to recognize that the inequitable treatment of employees will be exposed and won’t be tolerated; to ignore creating a sense of belonging and inclusiveness to all is to fall short of the relationship of trust that you, as board, have with your stakeholders, your community, and society writ large.

Rob Acton, Founder and Chief Executive Officer, Cause Strategy Partners

Rob Acton, CEO and Founder of Cause Strategy Partners, currently serves as Co-Chair of the Board of Directors of Broadway Inspirational Voices and as Vice-Chair of the Board of Directors of Nonprofit New York.   Recognized as an expert on good governance and nonprofit leadership, he has led hundreds of trainings, readying and preparing executives and professionals from Fortune 500 companies for high-impact board service.