Why does inclusive governance matter?

Every day, community organisations, companies, social enterprises and charities make decisions that shape our lives — from where we live and how we work, to how we respond to challenges like homelessness, family and domestic violence, climate change, disability rights and First Nations inequality. When the people around the board table reflect the diversity of the communities they serve, organisations make smarter decisions, build stronger connections, and deliver better outcomes.

Yet too often, this is not the case. In many organisations, boards are dominated by older professionals who bring strong skills but often lack the lived experience or diversity needed to fully understand the issues at hand. When this happens, boards risk overlooking key realities and solutions.

For example, in the top 300 companies listed on the ASX, the average age of a director is 61, with nearly 88% over 50. In the NFP sector, 68% of board members are over 50 and more than a quarter are over 65.

Research shows that inclusive boards outperform others by around 27% — delivering more innovation, stronger results, and greater impact. They also build stronger community relationships, attract more stable funding, and create programs that work more effectively on the ground.

The Current Situation in Australia

Australia has around 600,000 not-for-profit and community organisations, including 440,000 small informal organisations run entirely by volunteers. Each has a board or committee responsible for governance.

Around 57,000 of these organisations are large and economically significant — including well-known charities such as the Australian Red Cross, Mission Australia, Anglicare and Life Without Barriers. There are also about 12,000 social enterprises in Australia, making this the fastest-growing part of the for-purpose sector.

That means there are tens of thousands of boards across the country, making decisions that affect different communities every single day. Yet many of these boards do not include:

• anyone under 35

• people from culturally diverse backgrounds

• people with lived experience

• people with disability

• First Nations voices

  
  

Globally, companies like Unilever and The Body Shop UK are now embedding young and diverse voices into leadership. In Australia, some NFPs such as YWCA Australia have created dedicated board positions for younger women.

A New Approach to Governance

Addressing this issue is about more than just representation. It’s about recognising that years of professional or organisational experience are not the only qualifications for board membership, particularly in community and NFP organisations.

Strong boards need people with diverse experiences, perspectives and ways of solving problems. This means recognising the leadership potential of young people (under 35), whose career diversity, digital fluency and future-focused thinking can strengthen decision-making. It also means valuing lived experience as expertise — drawing on the insights of those who have navigated housing, justice, health, disability and community systems first-hand.

Importantly, it involves actively including cultural diversity, disability and First Nations voices in board conversations, and ensuring these perspectives are meaningfully incorporated into decision-making. True inclusion requires shifting the culture, practices and pathways of boards so that different voices are not just present, but heard, supported and empowered to have impact.

Inclusive governance asks boards to move from guarding the status quo to embracing sustainability and future-focused leadership. This is essential as we continue to face unprecedented disruption, uncertainty and change in the 21st century.

McKinsey, Diversity Wins: How Inclusion Matters, 2020; BCG, How Diverse Leadership Teams Boost Innovation, 2018)

Governance Institute of Australia and Watermark’s 2024 Board Diversity Index; Shaping boards of the future, 2025 Board Diversity Index; Elevating the client voice – Resource for NFP boards

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