Blacks constitute about 28% of the population of El Dorado, a small city in southern Arkansas built around the oil, natural gas, and timber industries.

But none of El Dorado's 6,480 minority residents serves as a director of any of the town's four community banks. And only two of the town's bank directors are women.

In this respect, the community banks of El Dorado are hardly unusual. Of a representative sampling of 72 community banks questioned in a recent survey conducted by Director Resource Group, a Warrenton, Va., consulting firm, 83% said they do not have any minority members on their board.

And small banks trail the larger regional banks, many of which have two or more women on their boards and at least one minority, consultants say.

The reasons for this lag are hardly surprising, according to observers. Smaller banks have less board turnover, with many members serving for 20 years or longer. What's more, smaller banks don't get as much publicity, so they are less likely to be criticized for their practices.

But aside from any moral imperative, bankers, consultants, and bank board members contend that banks without female and minority representation on their boards are denying themselves an important business benefit.

"When you don't have representation from all segments of a community, it's not only not right, it's bad business," said Richard H. Mason, an oil and gas executive and a director of First National Bank of El Dorado.

Mr. Mason, who is white, has been a tireless advocate for more minority and female representation on the board of $275 million-asset First National, a subsidiary of First United Bancshares. Last year, at his urging, the bank elected a woman to its board.

He has now begun urging that blacks be nominated, and he said he believes the bank is receptive to the idea.

Mr. Mason said it would be "unheard of" not to have someone from the local hospital on the board in order to have a director familiar with the needs of the medical community.

Roberta Wagner, president of Director Resource Group, added, "The purpose of a board is to bring different ideas to the table so you don't get tunnel vision."

But few small banks are pushing themselves to broaden the representation of their boards.

"Basically, the boards are saying that they don't feel there is a minority nominee who is qualified," said Mr. Mason. "But that's because they haven't looked."

Part of the problem, observers say, is that all-white, all-male boards perpetuate themselves.

"Directors are going to find new directors they play golf with, and, as a result, an awful lot of these boards look an awful lot alike," said Marilyn R. Seymann, chief executive of M One Inc., a bank consulting firm in Phoenix.

"But if you're going to market yourself as a community bank, what type of community bank are you if your board does not reflect the diversity of your own community?" she asked.

Some small banks have made changes.

Bar Harbor Banking & Trust Co. in Bar Harbor, Maine, elected its first woman to the board 10 years ago and now has two female directors - one is a former state senator who now owns a local clothing store, and the other runs an advertising agency.

Sheldon F. Goldthwait, president of the bank, said that in the same way women came to hold leadership positions in the local Rotary and Lions clubs, they are now being elected to bank boards.

"It was certainly about time," Mr. Goldthwait said. "There's no shortage of qualified women around."

National Bank of Commerce, one of the other El Dorado-based banks, is "currently seeking" either a black or a woman, said James D. Cook, the bank's chief executive.

The $135 million-asset bank formally decided last fall to begin the pursuit, its first ever.

"It's something we feel we should do, and we're probably remiss in not doing it sooner," Mr. Cook said.

Richard B. Foster, president of BanConsult Inc., an Okemos, Mich., consulting firm, added: "Smaller banks are just more set in their ways, and they may not see the need for it. But diversity is coming, and it will be healthy for these banks."

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