DEI is not something to finish but rather something to emphasize as a key driver for fulfilling business objectives.
Sponsored by Humanidei
In the second half of 2020, a nationwide social awakening had businesses clamoring to make statements of commitment to diversity, equity and inclusion. Companies—including credit unions—raised their collective voices around the value of DEI, knowing consumers were watching.
Today, the spotlight on DEI may be fading somewhat. Many businesses may be wondering if they are done with DEI, and leadership must refocus on key business objectives to stay competitive. For credit unions, the current environment necessitates discussion around compressed earnings, increasing regulatory burden, pressure to gain economies of scale through merger and even how to keep payroll competitive.
In fact, DEI is not something to finish. Instead of being a distraction from the rest of the business, an emphasis on board diversity can be a key driver for fulfilling mission and business objectives.
- The mission: The primary purpose for which your credit union exists. For example, a credit union’s mission might be to improve the financial lives of all members or to expand the economic capacity of the community.
- The business objectives: The goals that help you fulfill your mission. For example, a credit union might have an objective to “Increase mortgage lending by 15%, emphasizing mortgages to first-generation home buyers” or to “Grow membership by 10%, proportionally representing the demographics of our community (age, race, ethnicity, income level).”
Boardroom diversity contributes to a credit union’s mission and business objectives. A lack of diversity may even prevent its success. After all, if you have a mission to serve an entire community and no representation from parts of that community, how do you understand—much less put plans in place that meet—the needs of that community?
Four Ways to Stay Energized About Diversity in Your Boardroom
Consider the following ideas to help your board stay energized about DEI:
- Be intentional about board recruitment. Who is missing today that may ensure full representation of the community? As you answer this question, go beyond visible diversity dimensions to consider how your board may represent people from different socioeconomic levels, with different accessibility issues due to mental or physical ability, with varying family structures, and of nationalities that may have a different understanding of the financial system. Are there people in your community who may add perspective not currently represented on your board?
- Expand awareness and understanding. Does the board discuss changing community demographics, issues of race and economic disparity, and our leadership imperative to respond? Credit union leaders must have a comprehensive understanding of the social and economic issues their community is facing. This requires board-level conversations that go beyond reviewing last month’s financial performance to listening and engaging in open discussion around community data and how different segments and demographics in your community are affected by social, economic, environmental and even political factors.
- Turn on an equity filter. What structural, procedural, or logistical obstacles may prevent board diversity? Do your meeting times favor retirees over the currently employed? Do in-person requirements make it easier for people to participate when they live in specific markets or neighborhoods? Are announcements of openings more likely to reach members who use physical branches, read your mailed newsletter or interact with you through your app? Are qualifications or the application process likely to screen people out who may bring diverse experience? For example, do you require a credit check or a nomination from an existing board member to be eligible for consideration? Look at each of these factors and consider who might be more likely to feel welcome or more likely to be left out or overlooked due to the processes.
- Monitor and hold yourself accountable. What meaningful metrics will demonstrate growth? It is often said but bears repeating: “What gets measured, gets done.” Setting meaningful impact metrics, monitoring performance and holding an organization accountable are critical success factors. Boards may wish to identify community or membership demographic data and set short-, mid-, and long-term goals to match representation to the community. It may also create impact to identify key strategic issues and ensure board member skills position the credit union for its future.
Board diversity is about more than reputation and image. It is more than a social issue. It is a key business driver. When others’ focus fades, staying energized around the concept of board diversity by connecting it to mission and business objectives may be your competitive advantage.
Jill Nowacki is president/CEO of Humanidei.