When it comes to improving credit union board diversity, performing a self-assessment is one of the best practices to consider, according to Jim This, president and co-founder of the Paragon Group, an Olympia, Wash.-based CUSO owned by $894 million TwinStar Credit Union that offers board effectiveness evaluations.
Most important topics include: What type of knowledge and experience is needed?
"There needs to be a good blend of financial management, human resources and legal expertise," This said. "The board member with legal knowledge will not necessarily be the counsel for the credit union, but will be able to offer some insight."
Much of the picture of what a board "should" look like depends on the FOM, according to This. He said if there is one dominant SEG, it is important for the board members to have the ability to be heard by management at that company. Similarly, if there is a union involved, board members need to have influence with the union. Other important areas of influence are with the local government and media.
"Diversity can be carved into as many areas as the board wants," This said. "It could be by gender, by race, by age groups, or tenure on the board, as long as the board reflects the membership itself."
If the board consists of seven or nine people, This noted there might not be perfect representation of the FOM, but said the act of talking about it and working toward a goal makes for a more well-balanced and diverse board.
"The first step is acknowledging that the goal is there," he said.
Once the board has an idea of where it wants to head, Paragon Group asks the board to assess where it is today and identify any areas that might have some gaps. Once identified, This said the board can takes steps to recruit for those gaps.
"I am asked how to do that, and the best method I have seen is an associate board member program. Boards can appoint someone from outside the original SEG for a one-year term."
The associate board member attends meetings and participates in discussions, but he/she cannot vote. The one-year term gives both sides an out, This explained. If the person is not working out for the board, there is no obligation to reappoint him/her. If the person is not happy, he said, he or she is not bound to a three-year term.
"The associate board member program is the best method I have seen for filling gaps," said This.
