Like many of you, I’ve been fortunate to have volunteered my time on several local boards. Early on it was with an amazing group of older white men that took me under their wing to serve on the board of an organization that provided affordable housing to low-income community members, not too far from where I went to school and where my parents live today. It was my first board experience and they helped teach me the ins and outs of being on a board and made me feel welcomed in a way I had never expected. I then volunteered to be on the board of a local community college foundation that provided scholarships to some amazing people looking to further their education. This board was much more diverse in terms of race/ethnicity and gender. I then served on the board for the state’s largest immigrant rights group and now serve on the board for an organization that connects adults to children who are in the court system. Again, there was more gender and ethnic diversity on both those boards.
These have all been rewarding experiences. They opened me up to different areas of need in my local community. However, when I left credit union operations and settled into my new role, I took some time away from volunteering. A year later, I began to think about where I wanted to spend my time. Where does my heart truly lie? And then it hit me! Could it be that simple? Had the answer been right in front of my face the whole time? What better place to volunteer than a board of a credit union?
Earlier this year, that’s what I did. I joined the board of an amazing credit union in NE Portland that serves an incredibly diverse membership, has a diverse staff, and has a diverse board! We have several diversity dimensions represented on our board from gender, age, race, and ethnicity, to education, and professional experience just to name a few.
It is common knowledge that credit union boards do not have much diversity. But what does that mean? Humanidei and CUCollaborate recently partnered together to research board diversity. The report covers board size, women, race/ethnicity, and institutional performance of various-sized credit unions throughout the country. One of the most interesting pieces of information for me, in particular, was that most credit unions have no minority representation, and the Hispanic population was found to be the most underrepresented.
This is so interesting because the Hispanic demographic plays a major role in so many aspects that are important to credit unions. First, Hispanics are driving U.S. population growth and have become the largest racial/ethnic group in California (2014) and now Texas (2021). If your credit union is in either of these two states and you don’t have Hispanic board members, you are missing out on serving the largest racial/ethnic demographic in your state.
Furthermore, newborns are driving recent growth rather than immigration. A trend that has since followed is an increase in English proficiency for all Latinos but even more so for U.S.-born Latinos. When you consider the demographic makeup of boards, recruitment of Hispanic board members could lead not just to racial and ethnic diversity but also age. Even today, being in my early 40s, I’m still in the younger demographic of some of the boards I have and do serve on.
Now, let’s get down to the nitty-gritty. After all, I would not be doing my job as a board member if I didn’t think about the financial well-being of my credit union. Consider this, U.S. Latino buying power and economic output grew despite the pandemic. A recent report by the nonprofit Latino Donor Collective reported that in 2020, Latinos spent $1.84 trillion and U.S. Latino GDP growth was 3.1% between 2010-2020 while U.S. growth was 1.7% between that same time. A recent story in Forbes reported on the growing affluence of Hispanics, especially in households with incomes of $150k+. The article mentions that if Hispanics/Latinos living in the United States were an independent country, their GDP would be the eighth largest GDP in the world. Culturally what’s important here is that Hispanic/Latino values focus on family, hard work, responsibility, stability, and community. This suggests a “We-Centered” approach rather than a “Me-Centered” approach. Take the movie “Encanto” as an example. It is centered around the family and every family member doing their part for the well-being of everyone, including the community. As a cooperative, credit unions are the epitome of a similar culture. Credit union boards must understand this market. If it makes dollars, it makes sense.
For those of us who work in the DEI space, it will not be surprising to you to find out that the research showed that boards with more women and non-white board members were prone to more inclusive lending and higher ROA growth. Why does DEI matter to you as a board member? It is your duty as a fellow board member to be a good steward of your credit union. The best way you can do that is to take a look at the makeup of your board and ask yourself, “Does our board represent the demographic makeup of our membership and community?”
This research has only strengthened my belief that becoming a credit union board member was the right decision. It has also strengthened the business case for DEI in credit unions. Here at Humanidei we have helped provide tools, resources, and training for boards that are looking to better understand DEI and actions to take to become a high-performing DEI board. True financial inclusion means that our credit unions are reflective of the communities they serve from the board of directors to tellers to deliver the best possible outcomes for its members. From one board member to another, I would encourage you to take action and rethink what you are doing to recruit diverse board members. After all, if you keep fishing in the same pond, you are going to continue to catch the same fish.