Although the U.S. has become increasingly diverse, credit union boards haven’t: Nearly half (46%) of credit union board members are over age 60 while only 6% are under age 40, according to the Filene Research Institute report, “Effective Credit Union Board Succession Planning.”
Plus, male board members outnumber their female counterparts by a 3-to-1 margin, and 89% of credit union directors are white.
Perhaps even more concerning: 88% of CEO survey respondents believe their boards lack sufficient financial services expertise.
Muse believes in being “intentional” to make sure the board has a diverse range of skill sets and other characteristics. “As we started opening up our market, we had to find ways to promote the credit union and find new board members who could identify with the credit union’s membership.”
That was the impetus for a board skills matrix the credit union developed to identify desired board skills, knowledge, and other characteristics; determine how the current board matches up to that ideal; and address any gaps that exist. The nominating committee assigns more weight to potential directors who meet criteria the board lacks.
“We’re currently looking for more diversity in where people reside, so we added more weight to that factor in the selection process,” Muse explains. “We give that direction to the nominating committee. We always say, ‘diversity isn’t hard, it just has to be intentional.’ The goal is to get the best people on the board that we can and serve our membership better.”
Other measures Visions Federal takes to maintain a top-notch board:
Former directors can run for board seats after a year if they want. “That way, we don’t lose anyone if we need to tap that pool,” Kidder says.
One current board member will “age out” once his term concludes, and two board members will leave the board during the next four years due to term limits. “We keep a grid so we know where the holes are,” Muse says. “We’re always in succession planning mode.”
“We don’t want to nominate anyone for election to the board who hasn’t already had Visions Federal experience,” Kidder explains.
The credit union also has a diverse mix of people on its seven-member nominating committee—those from different communities, young people, credit union staff and executives—to help it find a broader spectrum of potential board members.
In the past, the credit union has enticed potential volunteers to the reception by making a donation to the charity of their choice.
“These are great areas to tap into for people you’d want to bring into the fold,” Kidder says. “We’re very visible in the community so people seek us out. They’ll reach out to say, ‘I’m interested; just let me know.’”
“You have to be a known commodity,” Muse adds. “After a while, people start coming to you.”
These efforts have paid off, says Steve Hill, Visions Federal’s board governance monitor. “As we progressed and diversified, you could just see the change. Our board meetings are a lot more dynamic, and we progressed into new markets like business lending. I’m not sure the old board would have been eager to do that.”
“Every director brings different skills to the table, leveraging their occupational and educational backgrounds,” Kidder adds. “Our directors are very professional, and they desire healthy debate and discussion to resolve issues and oversee the credit union.”
Perhaps the best measure of success, he adds: “I’ve seen the size of Visions Federal triple over the past 10 to 15 years. I believe this is due to our strong management and staff, and our robust, professional board.”
NEXT: The ‘evergreen’ board