Why is your board diversity initiative failing?

A colleague who consults with credit unions was called in to speak with a Board. She was surprised by the chosen location for the meeting: It was known for great steak and… ahem… risqué entertainment. When she arrived at the gentlemen’s club, Board members “joked” that she was the first female allowed in since the credit union was founded, then asked why such a pretty lady wasn’t married.

Why had they sought her expertise? Board members believed in the value a diversified Board could add, but were struggling to attract and retain new Board members that were not aging white men. They had tried *everything* with no success.   

Now, my colleague (and probably most of you reading this) could easily point to a culture that contradicted the Board’s stated desire to be diverse and inclusive. This extreme example is rare; however many diversity initiatives fall short of expected results because of unintentional actions (like questionable choice of venue) that emphasize the status quo.

If your credit union has hit a wall in its pursuit of volunteer diversity, consider the following questions:

What does dissent look like in your Board room?

There are two times when dissent should frighten you: When it doesn’t exist and when there is always the same outlier.

An entire Board that shares a common frame of reference often shares similar understanding of problems and the best solutions. There are rarely split votes. Ideas are not challenged, creativity is not stretched, and reinvention (when needed) is nearly impossible.

Many Boards see the limitations of this and it becomes the impetus for Board diversity initiatives. Boards actively recruit one or two new members for unique perspective, then become uncertain about how to handle the accompanying dissent. A common and unintended consequence is pressure for assimilation to the group, diminishing any value diversity was meant to add.

When a new volunteer’s approach differs from the majority, is the perspective honored for being innovative or dismissed for not understanding “how things work around here”? Boards that actively cultivate a respect for diverse views position themselves better for long-term relevance and new Board member retention, which raises the next question…

Have you retained new board members beyond their first term?

A common lament is that new volunteers are not loyal like those who have served the credit union for decades. Long-serving Board members become frustrated when they invest the time to recruit and on-board new volunteers, only to find their enthusiasm wanes and they do not serve a second term.

Discouraged leaders attribute this one-and-done service to new volunteers lacking the heart or commitment for the credit union, but a deeper dive may reveal something different. Make time for in-depth exit interviews that probe: Did Board experience meet their expectations? Were they accepted by other Board members? Did they know how to make meaningful contributions? Was the unique perspective for which they were recruited valued?

New Board members passionate about making a difference in members’ financial lives can be as strong of champions as those who helped found the credit union, but if their role is simply to be a token representative of diversity, they are unlikely to continue giving time and effort. Help new volunteers feel ownership and comfort by examining long-standing traditions that might feel outdated or considering small changes- like communication channels or meeting venues-  that may make new Board members more comfortable with their roles.

Most importantly, ensure that Board service is an opportunity to make a meaningful contribution to members’ financial well-being by providing opportunities for strategic dialogue. If this challenges your credit union, consider the following…

How many “strategic” board-level conversations center around CD rates?

If you have built a Board that looks like your diverse membership, but strategic dialogue remains elusive, look beyond the surface. Gender, ethnic, and professional diversity provide a starting point for bringing together unique frames of reference, but if today’s Board conversations around product development and member service begin and end with CD rates, look deeper into your membership for volunteer leaders. Many of today’s credit union volunteers are ideal customers of big banks, investment advisors, and car dealerships that offer 0% financing. They do not lack access to affordable financial services. Certainly, strong fiscal responsibility is important for credit union leaders, but if decisionmakers think nothing of a $12 monthly fee or a $1,500 average daily balance, they may not be best-positioned to develop the strategy to meet the needs of your average (potential) member.

As the best financial partner for consumers– including the approximately three-quarters of Americans that live paycheck-to-paycheck– your Board must understand how each segment of your membership interacts with the credit union and their personal finances. Diversifying your Board by volunteers’ product usage or financial profile adds stronger understanding of member needs.

A high-transaction or credit-driven member will turn to the credit union for different needs than a long-term saver. They will also bring new ideas for how the credit union can expand services in these areas, ensuring the credit union is both relevant and valuable to its entire membership. The rich data your credit union owns can help identify members that will add diversity to your Board in this area.  

Volunteer Boards of Directors are a unique differentiator for credit unions. Building a Board of Directors that reflects the entire, changing membership opens the possibilities that lie ahead for long-term credit union relevance.

How have you introduced meaningful diversity efforts that will move your credit union into the future?