By Ray Birch
DES MOINES, Iowa—While more than half of all credit unions have committed to putting strong diversity, equity and inclusion (DEI) program in place, a new survey finds there is considerable work to be done when it comes to measuring the results those efforts are having not only internally but on the business.
According to one expert, less than half of those CUs know the real ROI of DEI.
Miriam De Dios Woodward, CEO at ViClarity, which provides governance, risk and compliance services, addressed the issue with CUToday.info, including how it can drives bottom-line performance at some credit unions.
De Dios Woodward estimates that 60% of CUs are committed to a DEI program that will make a difference.
“While it’s difficult to know the precise percentage nationally, 60% seems about right for those who have a strategic commitment to DEI,” stated De Dios Woodward, adding her estimate is also based on reports from NCUA and CUNA. “From our experience, we know that external DEI strategies are more successful when not only compliance is involved, but when credit unions have an internal focused DEI program that helps them support those initiatives. Therefore, it becomes even more important that credit unions look to build their own internal DEI strategies.”
Yet, for those that are measuring and monitoring DEI efforts, that 60% declines to about 20% to 30% of all CUs, De Dios Woodward estimated. She said that in the new financial landscape, 100% of credit unions should be thinking about DEI, defining what it means to them and employing relevant internal and external strategies.
“The world is becoming more and more diverse and that directly impacts the needs of members and employees at the credit union,” she said. “Credit unions that implement effective DEI programs set themselves up for future success and see benefits to membership growth, products and services, overall innovation and employee recruitment and retention, among other benefits.”
Information Being Gathered
Miriam De Dios Woodward
As CUToday.info has reported and as De Dios Woodward reminded NCUA has been gathering information about credit unions and their DEI programs through the agency’s voluntary Credit Union Diversity Self-assessment.
Recently, Renee Sattiewhite, president and CEO of the African-American Credit Union Coalition stated that not enough CUs are submitting their DEI assessments to NCUA.
“NCUA is still working on increasing engagement and responses to the survey,” De Dios Woodward noted.
De Dios Woodward pointed out many articles and studies have addressed why DEI is the right thing to do, but emphasized data is beginning to be collected to show it’s also the right thing to do for the business.
“And there is the other side, a kind of detriment, or downside to not incorporating DEI into your organization,” she said.
What Needs to be Measured
Erin O’Hern, VP of strategic services at ViClarity, told CUToday.info there are a number of areas an organization needs to be measuring when it comes to their DEI efforts.
“You can look at your internal activities to prepare staff, and prepare your organization, for a truly inclusive environment to then be able to deliver products and services,” O’Hern said. “You can look at the external financial inclusion initiatives that can contribute to your overall growth and measure those—I mean the standard measurements of any loan product, or any service. For example, default rates and other financial measurements.”
A Larger View
Those measurements would be incomplete, however, without looking at results from larger DEI initiatives that are integrated into the strategic plan, and flow up through governance, said O’Hern.
“So, it's both kind of internal and external and measurements that folks are looking at,” she explained. “This sort of internal and external look at DEI has been proven to strengthen the overall longevity and growth of a business.”
De Dios Woodward said ViClarity recently completed an employee survey that incorporated feedback from all staff.
“We were very intentional about incorporating some DEI questions into that survey,” De Dios Woodward said. “This was simply seven questions.”
De Dios Woodward exlained some of the questions were focused on finding out what staff thought inclusion should look like within the company and also what is missing on that same topic.
“We had those questions and some other open-ended ones,” she explained.
Setting a Baseline
De Dios Woodward said the recent survey set a baseline.
“Then we can start to track our progress over time, just with our employee base,” she said. “And out of that will come some really great ideas that we can roll into our broader initiatives for our DEI strategy. So, we have different kind of buckets, different subcommittees. We're constantly evaluating those and adding to those. As an example, part of your DEI strategy could be to diversify your partnerships in the community, and with the vendors that you work with.”
There are a number of hard and soft metrics CUs can use to measure results following adoption of a strong DEI program, according to De Dios Woodward. Membership and loan growth are two, and can be direct results of being more inclusive with the members the CU serves.
Who Looks Like Me?
De Dios Woodward explained that a culture of inclusivity builds trust within the community, and therefore more relationships, and deeper ones.
She added, too, that inclusivity must be seen, as well as heard, by the community, which means having staff that reflect the membership it serves. De Dios Woodward said she learned that lesson quickly when she was at Coopera, and credit unions that served Hispanics always fared best when they had staff who were Latino.
“That helps because your membership might be asking, why should I come to this credit union and work with you as a partner if there's no one who looks like me?” she said.