Revamping credit union governance: Addressing barriers and embracing equity

Credit union governance is broken. At least, that was my first impression.

When I had the chance to join a credit union board, I was excited about the journey. After 20 years working in various areas of the credit union industry as an employee, moving into a consulting role had presented an opportunity to become a credit union board member. I was able to volunteer for a credit union that holds a special place in my heart. Unfortunately, that excitement wore off quickly, replaced by frustration.

Our credit union had been using the Carver Governance Model, a system for organizational governance that was developed by John Carver in the 1970s. The model teaches that the Board of Directors is responsible for setting the organization’s policies, while the management team is responsible for implementing those policies. In principle, this sounds easy enough. In practice, our board members were finding frustration around understanding Carver and ends statements. Ends statements in Carver governance define the results that an organization wants to achieve. Ends statements are typically written in the following format: The organization will (result) for (recipient) at (cost or priority). The result is the change that the organization wants to make in the world. The recipient is the person or group of people who will benefit from the change. The cost or priority is the amount of money or the level of importance that the organization is willing to put into achieving the result. For example, an ends statement for a nonprofit organization that provides housing for homeless people might be: The organization will provide safe and affordable housing for homeless people at a cost of no more than $500 per month.

Now, this frustration and lack of understanding might have been because our ends statements were not well written and did not produce the information we were looking for. Or perhaps it was simply difficult for me to understand. Either way, our board considered, whether our current form of governance was bringing people in or keeping people out. We realized our approach was keeping the entire Board from engaging as fully as they should, excluding some from full participation. Although it would be time-consuming for our volunteer board, we were committed to shifting to a different governance structure that would be more inclusive for current and future board members. With the help of a consultant, we began that process and have continued to work towards finalizing our new structure.

This also brought up the question for our Board about what other barriers might exist in our Board policies, processes, and procedures. As a Board that is looking to be intentional with our Diversity, Equity, and Inclusion (DEI) efforts, we further decided to integrate a DEI Equity Lens. An equity lens introduces questions to help decision-makers focus on equity in policies, processes, and procedures. As a member of our DEI sub-committee, I created a DEI Equity Lens document, and with input from other committee members, we were able to refine it. During our annual board planning session, I introduced the DEI Equity Lens to the board, and we spent some time applying the equity questions to our strategic goals. This exercise helped the board and credit union leadership better understand the equity lens and practice using it. After further refinement, we will formally adopt its usage in our Board policies, processes, and procedures.

During a discussion about vision and mission, we integrated and considered the usage of the equity lens. The outcome was that many of our draft examples about vision and mission included different forms of the word equity. It made an almost instant impact on our discussions, and I am excited for the results we will see moving forward.

Boards constantly deal with recruitment issues and may be especially challenged when looking to diversify through the inclusion of people of different races, ages, ethnicities, genders, sexual orientations, and mobility. By asking, “Do our current board policies, process, and procedures create barriers to who can join our board?”, Boards may build an understanding of obstacles that could get in the way of inclusion.

If you are unsure about the level of equity in your Boardroom, consider creating and using an equity lens to answer that question. At Humanidei, we work with boards to educate them about diversity, equity, and inclusion and the actions they can take to be high-performing Boards. Diversity, Equity, and Inclusion start at the top and the board plays the most integral role in an organization’s success. We would love to help your credit union reach the highest level of success in this area.

Contact the author: Humanidei

Contact the author: Humanidei

Oscar Porras

Oscar Porras

Oscar Porras started his career in the credit union industry over 20 years ago. He has primarily worked with community members of modest needs, credit union professionals of diverse backgrounds, ... Web: Details