MADISON, Wis.–Is there a business case to be made for diversity, equity and inclusion (DEI) practices at credit unions? The Filene Research Institute says there is and it will soon release research that makes that case.
“We often hear about the ‘business case’ for diversity, or how diversity at different levels of an organization can improve financial performance,” said Filene. “What we don’t hear about are the specific practices that help drive business value.”
Similarly, said Filene, organizations often assess their success in managing diversity by instituting what are considered to be “best practices” in the field, but what isn’t heard are “specific practices that help drive business value.”
Filene said its Center for Excellence in Diversity, Equity and Inclusion is seeking to fill that gap by presenting both the “business case” for DEI practices and specific practices.
“Specifically, we were interested in identifying the reach of different DEI practices within the industry and how such practices create value in credit unions,” said Filene. “Therefore, we conducted a study to examine relationships between bundles of DEI practices and measures of operational and financial performance.”
The Survey
Filene said it surveyed CEOs, CHROs, chief diversity officers, and other leaders at credit unions and system partners about DEI policies and practices that have been implemented since 2019 or will be implemented this year. The organization said it received 232 responses from credit unions and partner organizations that have an average assets of $1.9 billion, 332 full-time employees, and 16 branches.
Filene said its preliminary results revealed several bundles of DEI practices that are already being used by credit unions, including bundles focused on:
- Strategy
- Governance
- Staffing
- Training
- Development
- Work-life balance
- Accountability
Variability Found
“However, there is variability in the extent to which these bundles have been implemented,” said Filene. “For example, while approximately two-thirds of respondents advertise job opportunities in outlets designated for diverse talent pools, have diversity training, or identify and develop diverse high-potential employees, less than one-third have a section of their website dedicated to DEI, utilize affinity or employee resource groups, or have a supplier diversity initiative.”
Filene said it matched survey data with credit union data across several indicators of operational and financial performance to examine the effects of DEI practice bundles, explaining that its initial findings show three bundles of DEI practices to be related to firm performance:
- Strategy: strategic approaches to DEI that enable a credit union to achieve its mission and goals
- Governance: actions taken to coordinate and monitor a credit union’s approach to DEI
- Accountability: formal performance standards to ensure progress towards a credit union’s DEI strategy and goals
Higher Performance
“Firms with more DEI strategy, governance and accountability practices are shown to have higher performance than firms with fewer practices within these areas,” Filene said. “These preliminary results suggest that strategic approaches to DEI may be effective for focusing credit unions on how DEI create value and relate to the achievement of business goals—thus helping them to elicit and realize the benefits of diversity in ways that enhance performance. “
Adding it still has more “data to sort,” Filene said it will be announcing additional insights in the near future.