By Ray Birch
MADISON, Wis.—As Americans prepare to mark Martin Luther King Day, which now recognizes not just Dr. King’s legacy but also the importance of diversity across the nation, a new study reveals effective DEI practices don't just make a credit union feel better about itself, they drive business results.
The Filene Research Institute report also outlines steps credit unions can take to establish effective DEI programs and shares benchmarks to measure results.
According to Filene Chief Product Officer Christie Kimbell, the “first of its kind” study, which drives down to methods to establish and measure DEI at credit unions, was not a simple task. She called it the “largest study of its kind, to date.”
The project collected 304 responses from 232 credit unions and system partners, which corresponds to a 4% response rate for the entire credit union system, representing approximately 25% of all credit union assets, Filene said.
“While DEI has been top of mind for credit unions for a while, that attention has certainly accelerated since the murder of George Floyd,” said Kimbell.
Kimbell emphasized the study—the Credit Union DEI Policies and Practices Survey—was able to identify what is working with DEI among credit unions that are performing well.
“The study not only shows that, but it also makes a business case for DEI within credit unions,” said Kimbell, addng the study has been able to document how DEI success drives greater business success. “If the credit union is going to invest in DEI practices, this study shows which practices are the most effective.”
A ‘New Paradigm’
The report determined the best practices based on credit unions in the study that are “excelling” with DEI. Kimbell explained the study, carried out by Filene’s Center for Diversity and Inclusion and led by Dr. Quinetta Roberson of Villanova University and who leads the Center, identified a “new paradigm for the implementation of DEI,” one that emphasizes the importance of enterprise-wide alignment around DEI, including adding DEI to the strategic plan.
Kimbell said the report further makes clear that individual DEI practices are not as effective on their own. Instead, DEI policies and practices are best implemented in clusters or “bundles,” and that an integrated, strategic approach to DEI produces the most impact for organizations.
The report uncovered three DEI bundles that drive credit union financial performance more impactfully than others: strategy, goals and tracking.
The results were eye-opening, according to Kimbell, who explained that those CUs using using the bundles approach had a higher return on assets and higher net income than those that did not.
“This is better, too, than just doing what we call ‘counting,’ where you just count the number of DEI seats you have in your organization,” explained Kimbell, noting that counting does little to ensure the credit union has strong DEI representation throughout all levels of the organization.
Best Strategic Practices
Kimbell said the strategy bundle includes the following strategic practices:
- Having a chief diversity officer
- Establishing a DEI committee
- Having a written DEI policy
- Establishing a DEI strategic plan
- Aligning DEI with business activities
The second and third bundles—goals and tracking—both focus on the following, according to Filene:
- Fairness
- Employee opportunities
- Hiring staff from underrepresented groups
- Equitable practices
- Engagement
- Inclusion
- Retention
A Pint of Emphasis
Kimbell emphasized that when credit unions are designing systems for managing and leveraging DEI, they should consider adopting related practices simultaneously.
She explained that the bundled approach emphasizes the complementary and reinforcing nature of DEI practices and communicates an organization’s philosophy or guiding approach to DEI. As a result, the performance effects of individual DEI practices are amplified, she said.
Timothy Anderson
“Therefore, when designing systems for managing and leveraging DEI, credit unions should consider adopting related practices simultaneously,” Kimbell said.
Need for Additional African-American Leaders
Meanwhile, with MLK Day here in 2022, Kimbell acknowledged the movement also needs more African-American leaders.
“There is still much work to do, but the good news is a lot of credit union leaders are so passionate about DEI,” said Kimbell.
In a previous CUToday.info report, US Senate FCU CEO Timothy Anderson pointed out the African-American Credit Union Coalition (AACUC) in 2017 did research and determined there were fewer than 50 African-American credit union CEOs. Anderson emphasized the finding was only an estimate, and following conversations in 2018 with credit union leagues, he believed the number of African-American CU CEOs is approaching 100.
Renee Sattiewhite
In a following CUToday.info report, Renee Sattiewhite, president of the AACUC, said she sees real change taking place in the country and credit unions. She cited several factors—growing interest in support for AACUC and its own growing role in becoming a stronger resource for talent, more executive positions related to DEI being created in credit unions, and just the changing “color” of the credit union workforce.
A Collective Effort
“This is a collective effort and it can't just happen within individual organization. This has to happen system wide,” said Kimbell about driving DEI within the movement. “Having data is the first step to knowing where the gaps are and it gives more visibility into what are our DEI priorities and where we need to be.”
Kimbell said Filene is preparing for the second iteration of the Credit Union DEI Policies and Practices Survey, launching March 2022.