Encouraging Young Professionals to Serve on Boards for Credit Union Growth

What do credit union board members who are 65 years and older really know and understand about the lending needs of young consumers, their product and service expectations, and their banking technology demands?

While many senior board members bring value to the credit union movement, Bill Kennedy strongly believes that credit unions need, more than ever, young professionals to serve as board members who can help steer credit unions to future growth opportunities. Kennedy’s idea is for senior executives to encourage young credit union professionals they are mentoring to serve as board members at non-competing credit unions.

“One of the sacred cows of the credit union movement that rarely gets addressed, for whatever reason, is the age of board members,” Kennedy said, a seasoned credit union executive who currently serves as CFO for the $471 million SecurityPlus Federal Credit Union in Baltimore. “Many board members are in their 70s, and they don’t have any youthful perspective about technology and the needs of technology and it’s making their credit unions irrelevant. You can’t have 70-or 75-year-olds making decisions for Millennials. It just doesn’t work. In my journey of mentoring young professionals, I highly encouraged them to take a look at getting involved on credit union boards. The credit unions need it, especially the small credit unions, they need a youthful perspective.”

At 31, Kennedy joined a credit union board, which he says fueled his career development. And based on that positive experience he routinely recommends board service to many of the hundreds of future leaders he has mentored over the years, and he is now on a mission to convince credit union executives to consider doing the same.

Many credit unions, however, seem to be falling short at attracting young board members. The evidence to support this key finding is in a 2021 CUES special report on the state of credit union governance, which found that credit unions continue to struggle to improve demographic diversity in the board room.

After surveying 181 credit union board members at all levels and professionals in January, the CUES special report revealed the demographic composition of boards is 65% male, 84% white and 46% are over the age of 65. Only 10% of credit union board members are under the age of 40, the Millennial generation. The oldest cohort of the Millennials turned 40 this year.

Kennedy believes encouraging young credit union professionals, or young professionals from other industries, to serve on the board creates a trifecta effect. And young professionals who are currently serving on credit union boards agree with him and share their perspectives about their experiences.

Kennedy explains the first win is that young professionals serving on boards will learn salient skills on developing policies, strategic planning, budgeting, and about how senior management and board work together to grow the credit union. That leads to the second win for young professionals who gain additional experience and expertise that can help them obtain a senior management position, including CEO. Finally, the board benefits from fresh perspectives on what young consumers want and expect from their financial institution that older board members may not be aware of or know much about.

Nick Fox, for example, joined the $229 million AmeriChoice Federal Credit Union board in Mechanicsburg, Pa., when he was 32. He turned 41 this year and believes he is the youngest member of the nine-person board. There are two other board members who are slightly older than him, but the age of the rest of the board members goes up quickly from there, he said.

Fox who is an attorney at a local law firm said the entire board understands the need to attract young members, and that he and the other younger board members, have been making the board aware of what the younger generations are looking for to meet their financial needs.

But Fox believes the challenge comes when the senior board members are under the default impression that young consumers will gravitate to the credit union because it represents the “nice and friendly” side of the banking business. While that may be true, Fox noted, just about every credit union and even community banks, can make that claim.

“So I think there’s got to be something more in the member experience where we make your life easier because we allow you to bank in the way you want to bank,” Fox said. “If you want to come to a branch, we have that. But if you want to be completely remote — by phone, kiosk, or internet, we have a solid offering for you.”

However, he explained that most Millennials, Gen Zers, an even some younger GenXers, in his view, want to do their banking as quickly and as easily as possible with no human interaction. That means being able to fill out an application for a car loan on a smart phone or on the credit union’s web page and get approved without having to speak with someone. Fox noted that his credit union’s usage of telephone banking is declining.

“The younger folks are not using it and would sort of poke fun at the notion of using something like that,” he said. “They want to do everything either on the internet or on their phone without talking to anyone and with no human interaction. I think that the credit unions, regardless of size, which are aware of that mindset are going to be the ones that thrive.”

Aubrey Ward, 37, who joined the board of the $5.6 billion Veridian Credit Union in Waterloo, Iowa, in August 2020, wholeheartedly supports Kennedy’s idea and hopes that it will grow within the industry.

“I think it’s a great idea. I know from my past experiences, what I ran into is that some credit union partners have in their HR description that you can’t sit on other boards, or credit unions don’t want other credit union employees sitting on their board,” Ward said. “So I think that’s something as an industry we need to discuss and look at because there’s a lot of young professionals in CUSOs and other businesses that want to put in the time and effort to help credit unions grow. They have a wealth of knowledge from working in the industry and they can bring that to the board. I think it’s something that needs to happen more often.”

Ward, who launched her credit union career at Veridian CU, is now working as CUNA’s associate manager for Learning Solutions Success.

As a young credit union member, Ward said she brings a fresh perspective from her financial and personal life.

“I think there’s still even those that are younger than me that need to have their opinions heard,” she said. “I can bring it from my perspective, but I don’t know what it’s like to be a college student right now in a COVID world and what they need. So they (boards) need to go into it with making sure they’re getting those perspectives, whether it’s from board members, surveying their membership or even their frontline staff.”

Tom Sakash, 35, CUNA’s manager of Small Credit Union Initiatives, who serves on the board of the $57.2 million Madison Credit Union in Madison, Wis., says Kennedy’s idea is not just a good idea, but it is crucial to any credit union’s future.

“For young professionals themselves, it’s a great experience. There is a whole list of things you learn by being a board member,” Sakesh reflected. “From a credit union perspective, it is so important that they attract younger folks to the board because they’re the ones that set the direction for the organization. And if your goal, which it should be as a credit union, is to attract young members because those are the folks who are entering the first stages of their life where they’re making those big financial decisions, you want young professionals on your board to tell the credit union where it needs to go, and how it needs to evolve so that it can keep attracting those young members. I think that’s absolutely critical.”