Diversity is something every business and governing body can benefit from. Diverse groups can offer more creative and innovative solutions, and they consider more perspectives that groups with similar members in terms of age, race, religion, education, and background may not. But what does that mean for your CU? Let’s discuss the benefits of a diverse credit union board of directors.
Your board of directors plays an integral role in creating and managing initiatives that sustain and grow your credit union as a business. Your board is also the place innovation goes to thrive – or die. That’s why diversity is even more important when it comes to creating sustainable innovation within your credit union.
The Role Diversity Plays in Creating an Innovative Board of Directors
Recently, there was an academic article that published findings directly related to the importance of diversity on boards of directors’ effectiveness and its impact on innovation. According to the study, the “systemic understanding of market trends, value chain developments, and consumer or customer needs are some of the factors that contribute” to the success of a business.
In order to maintain that understanding of market trends and change factors, it’s important that you have a wide array of voices and experiences represented on your credit union board of directors.
And in recent years, the board of directors has come to not only help guide the strategy, high-level structure, and leadership appointments in a business. It has also taken on the role of establishing structure and guidance when it comes to company culture, sustainability, and ethics.
Because innovation isn’t just one thing, it’s a hard metric to study. But the academic article we are mentioning here underscores the idea that innovation can only truly thrive as an “attribute of organizations” – a core tenant of your credit union’s business dealings – where there are many different perspectives working together to find the best solutions and growth opportunities.
Benefits of a Diverse Board
Other than driving innovation, there are many benefits to creating a diverse credit union board of directors.
First, it positively affects the community at large. Credit unions are built for serving the communities they operate in. And that means your board needs to be at least as diverse as the communities you’re serving. Every community is different. Certain communities are more blue-collar, urban, Hispanic, or Jewish, for example. Creating a board of directors that is made up of voices and perspectives that can understand the true needs of the community your credit union serves is a great way to ensure certain demographics aren’t completely alienated by the initiatives you are putting in place.
For example, in and around the town of Berne, Indiana, there is a large Amish community. So, if you are trying to reach all of the diverse communities within your region to lower the barriers to entry on your services, offering Spanish is a great start.
But your board of directors should also think about including Pennsylvania Dutch (the language spoken by many Amish communities in Indiana and the USA) as a language or interpretation option on your materials.
Initiatives like this can help create opportunities for your credit union better serve and build trust within certain marginalized groups that are looking for your products and services. And that is a core component of fostering business growth for your credit union.
Focusing on diversity can also open your board of directors up to opportunities regarding non-traditional talent. If your entire board is made up of seasoned financial advisors and other banking-specific professionals, you are likely losing out on great opportunities.
Including board members who are local small business owners, online marketers, or other strategic and operational professionals can help create more well-rounded and well-received initiatives for your credit union.
Ways to Foster Diversity in Your Board of Directors
There are many ways to foster diversity in your credit union board of directors.
One easy way is to include young professionals already involved in your credit union’s work. You will get the dual benefits of having younger voices and perspectives in the discussion, while simultaneously training the next generation of board members on the strategies and insights that are necessary to keep your credit union innovative.
In that same vein, you should be hiring people with diverse backgrounds to join your credit union staff.
You can also tweak the size of your board to be able to reflect more diverse communities. The goal should be to create a board of directors that mimics the diversity of the community you are working in. If the community is 65% white, 12% aged 65+, 38% blue-collar, or 40% Black, your board should reflect that.
Another great way to diversify your board of directors is to evaluate each member’s effectiveness and participation. Increase transparency and publicity surrounding board nominations and elections, too.
For more great resources on fostering diversity within your credit union board of directors, check out the National Credit Union Association’s (NCUA) Diversity and Inclusion page.
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