The composition of the board is a mixture of people a board selects to oversee an organisation. This includes the proportion of directors who are inside and outside directors, the proportion of men, women and minorities, as well as whether the board members are of different generations. It also considers the level of expertise on management issues and governance matters like fundraising and legal risk.
Diversity is an important factor in a balanced board composition. Many boards are searching for new ways to diversify the membership. Companies can begin by conducting an audit of their current board members to determine gaps in diversity and decide the areas where recruitment efforts should be directed. Diversity should be considered across all areas including gender and race to age, education, qualifications and experiences.
A matrix of the needs of the board can assist boards in understanding what kind of individuals they need on their board. A matrix is a grid like Excel that lists the traits of directors on the board and the competencies required to carry out their duties. This data allows a committee to create a list of possible nominees, and then rank them according to how well they meet the requirements.
A board should be able to balance the interests of shareholders with those of the management team. This typically means that the board is comprised of a mix of inside and external directors, with inside directors having experience in managing non-profits or businesses. Boards will also have a chairperson, who oversees the work of the board and the committees.