Nicklaus: Banker sees networking as key to improving board diversity | David Nicklaus

Orvin Kimbrough knows corporate and nonprofit leaders are waking up to the importance of diversity on their boards. His email inbox tells him so.

Kimbrough, who is Black, is chief executive of Midwest BankCentre, a privately held bank. He’s a director of two other companies, including Core & Main, a water-infrastructure supplier that went public last year. He also serves on several nonprofit boards, including that of the national United Way.

Kimbrough feels fully committed, sometimes even stretched a little thin, but the board invitations keep coming. “I cannot serve on every board that might be interested in me, and I know I’m not that smart,” he said recently. “When I ask why they want me, they say, ‘Well, we have to diversify our board and oh, by the way, there’s competence.’”

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Kimbrough responds politely but pointedly: He isn’t the only competent Black person, and perhaps the organization needs to broaden its search. He often offers to make introductions, and in November he hosted a networking event where St. Louis nonprofits could meet Black and Latino professionals interested in serving on boards.

Becoming a director, corporate or nonprofit, is all about who you know. Historically, white male CEOs networked mostly with other white men, resulting in homogeneous boards.

In recent years, big investors have pressured corporations to find diverse directors. They’ve voted against members of all-male boards and, starting this year, advisory firm ISS will recommend voting against boards that lack racial or ethnic diversity.

“These people would say having a more diverse board gives you more diverse viewpoints and that will be beneficial for shareholders,” explained Justin Klein, director of the University of Delaware’s Weinberg Center for Corporate Governance.

Regulatory pressure also is building. Starting next year, the Nasdaq exchange will require each listed company to have at least two diverse board members, including a woman and a member of an underrepresented minority group.

The pressure has gotten results. Women hold 24% of board seats at companies in the Russell 3000 index, according to a Conference Board report, up from 15% in 2016.

One-fourth of Russell 3000 companies disclose directors’ ethnicity, and their numbers show that 79% of board members are white, 11% are Black and 4% are Latino. (By comparison, the U.S. population is 60% white, 13% Black and 18.5% Latino.)

Like corporations, the nonprofit sector has some distance to go before it truly looks like America. According to the latest BoardSource study, nonprofit boards are 84% white, 8% Black and 5% Latino. One-fourth of all nonprofits had all-white boards.

Kimbrough said his meet-a-director event was about “opening up our network and being part of the solution.” He sees charitable boards as good training grounds for future corporate directors.

“It serves as a pipeline from a nonprofit board to a university board, which is more selective, to a corporate board. It gets narrower as you go up and also less diverse,” he said.

Julie Erickson, chief executive of nonprofit pharmacy Rx Outreach, met two prospective board members at the November event. The two, both Black men, are likely to join her board next month.

They bring valuable skills in finance and information technology, she said, and will help Rx Outreach understand its community. “It’s really important that we have a diversity of thought and experience, especially as we navigate challenging times,” Erickson said.

Kimbrough intends to make his networking reception a regular event. Whenever he hears a leader bemoan a lack of diverse candidates, he has a ready response: You aren’t looking in the right places.

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