The board’s nominating committee should take note of several important new developments regarding board diversity, and how they may be applicable to its composition and refreshment policies. 

This continued focus on diversity is driven in large part by a broad cross-section of interested parties, e.g., institutional investors, pension funds, employees/labor unions, state governments and other stakeholders (including, for example, sources of new business opportunities for the health system). This focus applies to nonprofit, publicly held and privately controlled health systems alike. 

Noteworthy developments for the nominating committee include willingness of some major companies (including those in the technology and transportation sectors) to adopt a version of the NFL’s “Rooney Rule”; the New York City Comptroller’s “Boardroom Accountability Project 2.0” (with its model board skills matrix); the Midwest Investor Diversity Initiative (with its “toolkit”); various proxy voting guidelines; and the controversial proposed California legislation that would, if enacted, institute gender quotas for corporate boards of public companies headquartered in the state.

Of course, some of these initiatives have met with criticism. For example, a bill intended to require public companies to disclose the gender of its board of directors, has yet to be presented for vote by the US House of Representatives. In addition, the proposed California quota legislation is encountering substantial opposition from the California Chamber of Commerce. Such challenges should not, however, be interpreted as a retreat from broader policy and societal commitments to decreasing unconscious bias, and increasing the number of women and minorities for board positions.

As with issues of cybersecurity, the unrelenting frequency of diversity-related information threatens to dull the board member senses to what is otherwise remains a vitally important governance principle (i.e., that diversity along multiple dimensions is critical to a high-functioning board). The general counsel can be very helpful in maintaining nominating committee focus on this issue.