Lack of Board Diversity May Hinder Growth, Study Finds
A visitor sitting in on a typical credit union board meeting is likely to see 61-year-old white males who have served for more than a decade and are planning to continue their service for many years to come.
It may be the standard makeup of most boards, but it’s not the dream scenario if credit unions want to remain competitive, according to a new white paper from the CUNA Community Credit Union Committee.
While there has been some growth in the number of females on credit union boards, with male board members currently outnumbering females by three to one there is still ample room for improvement, according to the paper.
The research also showed that there was strong disagreement between CEO and board members on this subject. Eighty-eight percent of CEO respondents said their boards lacked sufficient financial services expertise, while only 22% of board members did. When board members were queried in follow-up interviews, this number jumped to 50%, according to the Filene survey.
One factor that may inhibit having more diverse boards is recruitment practices that are heavily skewed towards existing connections. Filene found that of those credit unions that still had strong ties to their original sponsor company, which is defined as having at least 75% of their board members coming from the sponsor company, the majority (72%) felt they were able to achieve sufficient diversity without looking elsewhere.