Diversity in board composition can extend beyond matters of age, gender and race to multiple other dimensions, including those of background and perspective. This is well demonstrated by the recent appointment of a highly regarded public health reform activist to the board of a consumer products company, as discussed in The New York Times.

As nonprofit health systems and other charities grow in size and scope, and interact more regularly with social and policy agendas, "diversity of perspective" may become an increasingly valuable director recruitment goal. In fact, the selection of directors with non-traditional backgrounds and perspectives may serve as means for assisting the corporation to achieve certain transformative objectives consistent with its core mission.

To assure the effectiveness of these appointments, several steps are recommended: First, the proposed new director should be fully briefed on the scope of the corporation's business affairs and its mission. Second, the areas of potential or actual conflict should be identified on a broad scale­, for both the corporation and the new director's own constituencies. Third, the expectations of what the new director's perspectives will bring to the board should be articulated—both to underscore the perceived benefits and to avoid suggestions that the appointment was mere "window dressing." Fourth, there should be clarity on the duty of loyalty obligations; that regardless of the new director's background, he or she must act in the best interests of the corporation.

Corporate Law and Governance Update

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