Board diversity best practices
This story is part of an ongoing series. Previous entries can be found here, here and here.

If credit union boards of directors are to mirror the diversity in their communities and memberships, simply waiting for candidates to wander in the door is not nearly enough.

That was the consensus from multiple sources with insight into the matter, including current board members, board chairs, consultants and more. They emphasized that the days of self-nominating friends of current board members need to end, as that practice tends to perpetuate non-diverse boards. Instead, the watchword today is recruiting – actively seeking out candidates who provide diversity not only in gender, age, income and race, but also their varied experience in business and in life.

Read on for a sampling of best practices and lessons learned from CUs across the country.
Sue Tatangelo Ventura County Credit Union
Filling skills gaps
Sue Tatangelo, chair of the board for $866 million-asset Ventura County Credit Union, Ventura, Calif., said the VCCU board has made a “focused effort” to diversify, including engaging an industry consultant to assist in identifying the board’s skills and talents, and developing an action plan to recruit for any gaps.

“We use this to guide the nominations committee when interviewing potential board candidates to ensure our board has member representation,” Tatangelo said.

As a result of these efforts, the current VCCU board is comprised of 57 percent baby boomers, 14 percent generation X and 29 percent millennials, she reported. The board’s executive committee is 80 percent female and 20 percent male, while the overall gender composition of the board is 57 percent female, 43 percent male.

The VCCU board also has Hispanic representation to reflect the local immigrant community, and the credit union is a member of Inclusiv's Juntos Avanzamos program, Tatangelo continued. It has two board members from its original SEG, two representatives from government, one from small business, one non-profit representative and one from the agriculture sector.

“Agriculture employs a large number of people in our community and the board has benefited from this perspective,” she said. “More recently, VCCU entered business lending and the board recruited a small business representative to provide input from this point of view.”
Nancy Herbert Elevations Credit Union
Elevations CU's three key factors
Nancy Herbert, chair of the board of directors for $2 billion-asset Elevations Credit Union, Boulder, Colo., said for decades, the CU’s board reflected the old stereotype of a credit union board being a group of white men over age 65. Then the board made two major changes that have "dramatically changed" the institution – it put nine-year term limits in place for board members during the 1990s and in 2003 converted to a community charter.

Determining a board's composition – with the ultimate goal of adding value to the credit union – is "one of the most important tasks of board governance,” Herbert asserted. She said in an effort to best reflect the current and future needs of the members and the credit union, the Elevations board continues to focus on a balance of demographics, as well as attributes and competencies for forward-leaning board succession planning.

“For us, the first step in board succession planning is a thoughtful process that entails examining each of the factors – demographics, attributes and competencies – currently represented by each of our board directors,” Herbert said. “Next, the board works with staff and our board governance coach to identify what current and future competencies would be most useful to the credit union. From there, the board comes to a consensus about the demographic, competency and attribute factors that should specifically be targeted in potential board candidates. We are currently in the process of a board succession plan update prompted by looming term limits. An expected outcome of this process is that we will engage an executive search firm to help seek out board candidates who meet the specifications set forth in the board succession plan.”
Stacey Walker XCEL Federal Credit Union
Want new volunteers? Ask for them
A volunteer board that mirrors the diversity of the credit union's membership isn't going to recruit itself.

“Recruiting board members of various identities informs issues of interest to XCEL's diverse membership," explained Stacey Walker, a board director at $169 million-asset XCEL Federal Credit Union in Bloomfield, N.J.. "Diversity is therefore dynamic and ever changing, so it is a constant purpose at XCEL.”

Walker said her institution has had some success using contemporary networking tools such as social media to recruit diverse volunteers, but it also relies on traditional networking. She said at recent annual meetings the CU has made an “old-fashioned” request for new volunteers.

“During the meeting, a request is made from the podium if anyone is interested in volunteering. Immediately following the request, XCEL mans a table for members who want to sign up and speak to current volunteers for more insight,” she said. “By opening up lines of communication at the annual meeting, leadership can immediately identify diverse candidates. This face-to-face method is most effective for XCEL to respond promptly to any interest in volunteering and to reinforce cooperative principles, especially pertaining to democratic member control.”
Susan Mitchell, CEO of Mitchell, Stankovic and Associates.
Susan Mitchell is the CEO of the consulting firm Mitchell, Stankovic and Associates.
Recruitment is a must
According to Susan Mitchell, CEO of Las Vegas-based consultancy Mitchell, Stankovic and Associates, people are changing the way they look at volunteer time, and credit unions hoping to recruit new volunteer board members will hake to take those considerations into account.

“There is a block of time that goes into being on a board, and are people going to be willing to commit?" she asked. "Credit unions should look at recruiting board members as a professional endeavor – bringing in people with certain skills rather than just one board member referring a friend. Examine the board and figure out what is missing, develop candidate profiles, and then go out and find that person.”
Marquetta White OneAZ Credit Union
OneAZ Credit Union describes the ideal director candidate
Marquetta White, board director for $2 billion-asset OneAZ Credit Union in Phoenix, said having a variety of voices in the boardroom is “terribly important.”

“A board should reflect the make-up of its membership so it can represent the spectrum of services that are appropriate to the credit union’s community, as well as driving the value, safety and soundness that is the foundation of credit unions,” White said. “I especially appreciate having younger people in the room because they are more tech savvy and will usually focus on excellence – not only in the adoption of new technology for members, but also to advance the board’s implementation tech tools.”

White noted she currently serves as chair of the nominating committee for OneAZ’s board. As such, she said recruitment of a diverse field of candidates is “front and center in my mind.” In the past when OneAZ solicited the membership for board candidates, not only were the results marked by the lack of diversity, but there was a failure to attract candidates with suitable business acumen or successful leadership in the community, White recalled.

“In fact, for years we had no contested elections. However, since we changed the way we marketed the invitations to self-nominate by providing a detailed description of the ideal candidate and requirements of the position, we have seen an amazing upgrade in both the stereotypical candidates as well as younger, more ethnically diverse members.”

White termed the credit union’s current recruiting efforts as “good start,” and said the next focus will be on further refining the message to attract even more diversity.

“In addition, we are working to develop a strategy to engage current board members with active recruitment of our next generation of board members,” White said. “Since we recently instituted term limits, succession planning has become of urgent importance, and once-unheard-of turnover must now be planned for. We recognize strong succession planning is essential to organizational success and stability.”
Michael Maxwell, board member at SCE Federal Credit Union
SCE FCU making specific diversity targets
Michael Maxwell, member of the board of $730 million-asset SCE Federal Credit Union, Irwindale, Calif., said diversity “improves outreach and connection with the community,” especially if the credit union has a wide field of membership.

“We are very self-aware of the current composition of our board, and are always striving to add any diversity that we lack,” Maxwell said. “On the flip side, targeting a diverse candidate who is not going to contribute can quickly become a negative. It is a constant struggle for balance, but being self-aware is the best first step.”

But, he added, one lesson SCE has learned is not to pass up qualified candidates solely because they don't meet diversity requirements. While the candidate might not be a 65-year-old white male, he or she could still “represent a similar member demographic as a current board member. This is not always a negative, as everyone’s life experiences and views are different.”
Linda Bodie, president and CEO of Element FCU
Make it a year-round effort
Linda Bodie, CEO of $33 million-asset Element Federal Credit Union, Charleston, W.Va., acknowledged that in the past her CU did not recruit a diverse board. She said in most cases, new directors were coworkers of existing board members.

“We did not have a good vetting process to ensure any potential candidates were sincere in advancing the credit union’s vision,” Bodie recalled. “Today, our outreach and connection to the community are better because each board member is unique, has different connections and interests, and brings more ideas and business to the credit union.”

But board recruitment can't just happen once a year or when current members announce their intention to leave, she emphasized, adding that Element FCU now treats its recruitment process as a “year-round effort.”

“Our board, management and staff continually search for people who would fit well on our board,” Bodie offered. “We talk about diversity and the importance to our board. We want a good mixture of ages, genders, races, occupations, skills and professions. If we are lacking in certain areas, we make sure to address the need for ‘X’ on our board. Our board consists of seven members, so this makes it a little more difficult to find all the diversity we would like. We have informal advisory groups and members who help us with any particular demographic or issue we need to address.”