By Ray Birch
WASHINGTON—At first blush, the prevalence of female CEO at credit unions is a strong sign of inclusion and diversity. But dig a bit deeper, and beneath the surface are trends that deserve more attention, send signals that are not a immediately apparent, and which show there is work left to be done, several sources told CUToday.info
To be sure, the fact a majority of CEOs at credit unions are women is viewed by many as a positive differentiator between credit unions and banks. As CUToday.info reported here, CUNA earlier this year released data showing 52% of chief executives leading credit unions are female. That’s compared to commercial banks, where only 5% of CEOs are female, while at Fortune 500 CEOs 6% of CEOs are female.
The trade association contends the number of women leaders not only illustrates CUs’ attention to diversity and inclusion, it also helps with advocacy efforts.
CUNA’s study also found that even when accounting for institution size, credit unions have significantly more female representation in leadership roles. For example, at institutions between $1 billion and $3 billion in assets, 14.2% of credit union CEOs are female, compared to 3.6% of bank CEOs.
An Advocacy Advantage
At both banks and credit unions, female CEOs are relatively more common at smaller institutions, but females are substantially more likely to rise to the role of CEO at credit unions than at banks at every asset level, the data show.
“From an advocacy perspective, banks are always criticizing credit unions for being just like banks and offering the same services and yet are excluded from paying corporate income tax,” said CUNA Senior Economist Jordan van Rijn. “So, if CUs are the same, we should see roughly the same percentage of female CEOs at banks and credit unions, accounting for difference in asset size. But instead we are seeing a big difference, and this is just another reason that confirms credit unions are special and unique and should be regulated and taxed differently than banks.”
‘Something to Work On’
The study confirmed what has long been a criticism of the overall finding: while women may lead a majority of credit unions, that number is skewed by the fact most of those jobs are at smaller CUs. Indeed, the percentage of female CEOs markedly decreases as credit union asset size grows.
“Yes, this is something that the industry needs to work on,” said van Rijn. “But this trend is common at banks and in other industries as well. But you still see more female representation at every asset level within credit unions, even at the larger ones, than at banks. The largest credit union in the nation, Navy Federal, now has a female CEO” (Mary McDuffie).
Overall, van Rijn said the data show that within the movement women generally still face a “glass ceiling” at the higher-asset-size CUs.
“That is something the movement needs to work on, as well,” he said.
Samira Salem, CUNA senior policy analyst, suggested what might be contributing to the high percentage of female CEOs in CUs of smaller asset sizes is those CUs are more likely to hire from within.
Jordan van Rijn
“Anecdotally, what we are hearing is that you have a more clear path to the top at smaller credit unions. You can move up the ladder more easily from inside,” Salem said. “Small credit unions have fewer employees, so you have a much different career ladder than at a large CU.”
No Indication of Gender Pay Gap
Accounting for differences in asset size, there is no evidence of a gender pay gap at credit unions, the study found.
“No statistically significant differences were found in compensation for female and male CEOs at similarly sized institutions,” said van Rijn. “We don’t have this data on the bank side. But on the credit union side we have a lot of it. Again, comparing institutions of similar asset size, we see no evidence of a gender pay gap.”
Salem said the finding further supports the movement’s attention to diversity and inclusion.
“We are very pleased by this finding and we know this is very much in line with the traditional values of all credit unions, and it is showing in the numbers,” Salem said. “You don’t find this within many other industries.”
Other Findings
The report also indicates that female-led credit unions are relatively more conservative from a risk management perspective than male-led credit unions. Among credit unions that experience a change in CEO with a corresponding change in gender (from male to female or female to male CEO), female-led credit unions hold relatively higher levels of capital adequacy, have lower mortgage concentrations and loan-to-share and unsecured assets ratios, and grow relatively slower in terms of loans and members, the study shows.
“Female credit union CEOs are performing very well,” said van Rijn. “Membership growth at female-led CEOs is about 3.4%. ROA is 86 BPs, and capital adequacy is 11%. There are differences between male-led and female-led CUs. For example, female-led CUs are a little more conservative, capital is higher, fewer delinquencies…While male-led credit unions grow a little faster.”
van Rijn noted that it’s difficult to say whether these differences are due to gender or due to other factors, such as the size of the institution and more women leading smaller shops, which typically perform differently than larger credit unions.
A Key Takeaway
Salem emphasized a key takeaway from the data is female CEOs are four times more common at large credit unions than at similarly sized banks.
“We are seeing the trendlines moving in the right direction,” she said. “At credit unions with over $1 billion in assets, the percentage of female CEOs increased from 8% in 2005 to nearly 15% today—that represents an 80% increase over that time period.”