Partnership aims to reshape credit union leadership by 2030

An ambitious new partnership aims to reshape credit union leadership demographics within the next decade.

They’ve got their work cut out for them.

The African-American Credit Union Coalition and Humanidei – a diversity-consulting firm launched by two of the industry’s highest-profile female leaders – have unveiled a goal to ensure women and people of color represent 30% of C-suite and other key leadership positions in the movement by 2030.

A 2018 study from the Credit Union National Association shows roughly Caucasians hold 95% of CEO positions in the industry, and leadership diversity shrinks as asset sizes rise – less than 15% of credit unions larger than $1 billion in assets are run by women. Out of more than 300 credit unions with assets above $1 billion, just six of those institutions are run by African-Americans, and only one of those six individuals is female.

“We as an industry have to change,” said Renée Sattiewhite, president and CEO of AACUC. "We have to migrate so that our boards and credit union staff reflect the membership we are serving."

“In the future I see board rooms looking differently,” Sattiewhite continued, forecasting the partnership’s impact. “I see executive suites looking differently [where] there’s a blend of many different faces.”

A recent survey from the Credit Union Executives Society revealed demographic diversity as the industry’s top priority for recruiting new board members, but term limits for directors are uncommon, meaning turnover could take a while. Still, the industry has spent the last year or so engaged in an ongoing conversation about how best to increase diversity, equity and inclusion. Among other initiatives, the Filene Research Institute recently announced the launch of a diversity research center focused on DEI issues.

To facilitate the partnership, AACUC will work with Humanidei to tap into the firm’s consulting services and executive recruitment, while Humanidei aims to introduce the coalition to potential leadership candidate and organizations, while also providing feedback on applicants. Part of the goal is for AACUC to help Humanidei better understand the hurdles its membership faces in the workforce so the firm can improve its methodology for conducting executive searches. AACUC will also provide referrals for Humanide’s recruiting service in order to help expand candidate pools.

While the two groups have a plan in place, their leadership recognizes they can’t do it alone.

“The industry as a whole would have to be committed to the idea,” said Jill Nowacki, CEO of Humanidei and former CEO of the Connecticut Credit Union League. “It’s not just saying diversity is important, but in actually taking the actions that contribute toward those goals if we want to see if want [change] made on an industrywide level."

‘It will take work’

Many organizations have become more public in recent years about their goals for increasing diversity at the upper levels of management.

A 2019 McKinsey & Co. “Women in the Workplace” study suggested companies should use targets more aggressively. The study also recommended that those in hiring positions undergo training to detect unconscious biases, which can play a large role in determining who gets hired or promoted.

One way for many organizations to get started is by removing biases that are commonly unknown, Nowacki said. A 2003 study from the National Bureau of Economic Research examined the prospects of fictional resumes with applicant assigned names that were either white-sounding or black-sounding in order to demonstrate that those with whiter-sounding names are more likely to get hired.

“We need to demonstrate where it’s difficult for people to get a foot in the door and make sure that our recruiting process accounts for that,” Nowacki said, emphasizing that the industry can’t move toward greater parity if only some institutions and leaders are on board.

Achieving the groups’ goal – let alone doing it by 2030 – won’t be easy.

Credit unions aren’t the only organizations looking to become more inclusive in their C-suites. The industry will have to compete withi similar measures at other types of financial institutions not only to place top talent, but to retain those same employees. And even if credit unions promote employees into the C-suite, they still need to rethink their culture if they haven’t started tackling inclusion or working to improve on inclusive behavior.

“What we’re seeing in the C-suite is that many people who were moving up in the pipeline are at some point deciding that the day-to-day experience and being passed over, ignored, not being sponsored or not being privy to plum assignments are all things that would contribute to someone’s decision to leave,” said Jennifer Brown, CEO and founder of Jennifer Brown Consulting, a firm focused on diversity initiatives.

Nowacki admitted “it will take work” to improve retention of diverse candidates.

Avoiding merger bait

The two groups will also have to contend with challenges related to demographics and credit union size. While 52% of credit union CEOs are female compared with just 5% at banks, according to a 2018 CUNA study, a closer look at those statistics shows that many of those female executives run smaller credit unions, which not only pay less but are also more likely to be acquired in a merger.

The National Credit Union Administration could be looped in to address this. Sattiewhite said AACUC hopes to work alongside NCUA to better assist minority depository institutions so those shops can receive meaningful technical assistance in order to prevent being viewed as merger bait.

“It would be nice if credit unions with Camel ratings of a 4 or 5 could receive technical assistance so that they can stay afloat and learn what they need to learn to be better and to have the help that they need to service their membership properly,” she said.

Still, the current hiring outlook is promising. The 2019 McKinsey study found that 44% more of companies had three or more women in the C-suite, up from 29% in 2015. That said, only one in five C-suite executives are women, and only one in 25 C-suite executives are women of color.

According to Nowacki, there’s a sense of urgency around talent that has not previously existed in the industry, so the team is looking to “leverage that and move forward with stronger commitment and greater intention in putting credit unions out as employers of choice moving forward.”