By Ronaldo Hardy
The NCUA and FDIC’s lack of diversity made CUToday’s headline news last week when a study uncovered the banking regulators had the least diverse workforces among federal financial regulators.
Just weeks prior to that, the lack of diversity of a credit union board in California led to a member uprising http://www.cutoday.info/THE-feature/SchoolsFirst-Asked-To-Make-Changes. Credit unions must take note of the various risks involved by not making diversity, equity and inclusion a strategic imperative. Implementing authentic and comprehensive DEI efforts presents a tremendous opportunity to increase innovation, employee retention and the authenticity of the credit union brand of social responsibility.
A board lacking diversity is not inherently racist, but we must consider current roadblocks to equity. Without Black voices on the board, policy perspectives affecting those members is sorely missing.
For example, less than 45% of Blacks own a home, while more than 70% of Whites own their home, according to Census.gov. What are the obstacles we could be resolving for them? Do we even know? Only 5% of credit union CEO positions are people of color and 90% of board members are White, according to CUNA, which is mirrored in executive team composition.
Legacy systems have not been built with equity in mind, and it’s a blind spot that causes headlines such as those mentioned above. Credit unions were founded upon the principal of inclusion for those who could not otherwise access financial institutions. These people still exist to today. It’s simply difficult to see what you do not know, and then take action to change it.
Must Seek Out Bias
Very intentional DEI efforts are essential. We can only affect change when we recognize bias, which many times we cannot when it’s not our life experience. We must seek out diversity, include them in the discussions that drive change, and then execute. Making a statement of support is not creating meaningful change.
A recent BAI study discovered 86% of those surveyed indicated their organization was committed to diversity but struggled with developing a comprehensive plan and approach to DEI and measuring success. Many organizations want to do good, but there is disconnect between desire and outcome, making benchmarks critical.
In my experience leading credit unions and other organizations, navigating transformative change is a multilayered and requires multiple years to implement, following goals and benchmarks.
The Recommendation
CU Strategic Planning recommends a three-year DEI strategic plan for each credit union. DEI should be elevated to a strategic objective, touching all facets of the operation. Anything less than that will remain at a merely performative level, rather than spawn truly transformative change.
Implementing DEI correctly centers around five key areas: Community Development, Board Governance, Management, Brand and Culture. Each area requires a multistep process for implementation, vital to ensuring full execution. Getting started is the hardest part and requires buy-in from the top. Elevate this discussion to the board level to determine what your credit union would like to accomplish, where it stands currently and the appetite for a long-term, DEI strategic initiative.
Determine your true commitment to DEI for real change in your organization and the communities you serve.
Ronaldo Hardy is chief diversity and inclusion officer with CU Strategic Planning. For info: www.custrategicplanning.com.