DI­VER­SITY ELU­SIVE IN BANKS’ TOP RANKS

Anti-racism protests, mul­ti­cul­tural re­al­ity in­cite ur­gency for change

Calgary Herald - - FINANCIAL POST - DOUG ALEXAN­DER

More than half of Toronto’s pop­u­la­tion is for­eign-born — a higher pro­por­tion than New York, Paris, Lon­don or Syd­ney — and about 52 per cent iden­tify as a vis­i­ble mi­nor­ity. But the city’s di­ver­sity fades in the up­per ech­e­lons of its fi­nan­cial firms.

At Canada’s Big Six banks and two large life in­sur­ers, 10 per cent of top ex­ec­u­tive roles and eight per cent of non-ex­ec­u­tive board po­si­tions are held by vis­i­ble mi­nori­ties, ac­cord­ing to data com­piled by Bloomberg. Of 188 top ex­ec­u­tive and board po­si­tions at those eight com­pa­nies, only one is oc­cu­pied by some­one who’s Black — a bank board mem­ber who lives in Chicago.

Canada has opened the door to large num­bers of im­mi­grants in re­cent years, and bank ex­ec­u­tives are quick to high­light the ris­ing di­ver­sity of the in­dus­try’s work­force. At most banks, more than a third of their staff in Canada are non-white. Ex­ec­u­tives face more pres­sure than ever to do some­thing about the glass ceil­ing that has long faced those em­ploy­ees.

“A lot of these com­pa­nies are go­ing to lose great tal­ent if they do not act, be­cause quite frankly they need those peo­ple who are stuck in mid­dle man­age­ment,” said Wes Hall, a prom­i­nent Black Cana­dian ex­ec­u­tive whose firm, Kings­dale Ad­vi­sors, coun­sels boards and ex­ec­u­tives on gov­er­nance mat­ters. “Once they start leav­ing in droves it’s go­ing to cre­ate a huge void in the com­pany that you just can’t ig­nore any more.”

Last month’s killing of Ge­orge Floyd in Min­neapo­lis po­lice cus­tody spurred protests around the world, in­clud­ing in Canada, where it has reignited a de­bate about equal­ity and cor­po­rate power. Hall has teamed up with some top ex­ec­u­tives — in­clud­ing Vic­tor Dodig, chief ex­ec­u­tive of Cana­dian Im­pe­rial Bank of Com­merce — to launch the Black­north Ini­tia­tive, which has a goal of in­creas­ing the num­ber of Blacks on boards and in ex­ec­u­tive roles.

Fi­nan­cial firms in Canada have left a lot of room to im­prove on that mea­sure. And some be­lieve it may be time for a more ag­gres­sive ap­proach to chang­ing the racial makeup of banks’ se­nior lead­er­ship.

“You’ve got to set ob­jec­tives and mea­sure what the im­por­tant mile­stones are to­wards that ob­jec­tive and what needs to get done, and know quickly when you’re not on the path to suc­cess,” Royal Bank of Canada CEO David Mckay said Tues­day in an in­ter­view. “If you keep do­ing the same old, same old, then we’ll get the same out­come. We have to ap­proach this dif­fer­ently.”

Two banks — Bank of Mon­treal and Na­tional Bank of Canada — have no racial di­ver­sity on their boards or among top ex­ec­u­tives. There are no mi­nori­ties in the C-suite of Royal Bank, CIBC and in­surer Sun Life Fi­nan­cial Inc., though they have some mi­nor­ity rep­re­sen­ta­tion on the board.

“While we’ve made progress — and we can see it in our suc­ces­sion pool — we need to do more to strengthen those pools so that we have broader di­ver­sity,” Royal Bank chief hu­man re­sources of­fi­cer He­lena Gottschlin­g said in an in­ter­view. “We will not look like what we look like for­ever.”

Royal Bank, Canada’s largest lender by as­sets, has a pro­gram to ac­cel­er­ate de­vel­op­ment for mi­nori­ties that tar­gets lead­ers one or two lev­els be­low the ex­ec­u­tive branch and is do­ing more spon­sor­ship and re­cruit­ment to change that “top-of-the-house view,” Gottschlin­g said. As of last year, 19 per cent of ex­ec­u­tives and 27 per cent of new ex­ec­u­tive ap­point­ments were vis­i­ble mi­nori­ties.

At Bank of Mon­treal, mi­nori­ties hold 39 per cent of Cana­dian jobs and more than a third of se­nior man­ager level roles and above, though there are none at the top.

“We’ve got some things we’re re­ally proud of and we’ve got other places where we’ve got a lot of work to do,” Bank of Mon­treal CEO Dar­ryl White said Wed­nes­day in a BNN Bloomberg TV in­ter­view. “I come to this with the view that we’ve got a lot to do but there’s a lot of mo­men­tum and a lot of hope.”

Sun Life, which has less di­ver­sity at the top than ri­val Man­ulife Fi­nan­cial Corp., is in­creas­ing di­ver­sity ef­forts in­clud­ing set­ting tar­gets to lift the per­cent­age of vice-pres­i­dents and above who are from a di­verse eth­nic or racial back­ground, CEO Dean Con­nor said.

“Frankly we’ve not done enough on di­ver­sity by skin colour, back­ground, vis­i­ble mi­nor­ity,” Con­nor said in a June 8 in­ter­view. “That’s some­thing that we’re go­ing to re­dou­ble our ef­forts on.”

CIBC is the only ma­jor Cana­dian lender with a Black per­son in a board or top ex­ec­u­tive role, with di­rec­tor Michelle Collins, though she’s the sole mi­nor­ity at that level in the com­pany.

“We are ex­pe­ri­enc­ing the ef­fects of de­ci­sions made prob­a­bly 10, 15 some­times even 20 years ago, which is re­ally the de­vel­op­ment cy­cle it takes to get to ex­ec­u­tive or even board lev­els,” Anne-marie Dunn, se­nior vice-pres­i­dent of en­ter­prise tal­ent at CIBC, said in an in­ter­view. “If you add to that the re­al­ity that even a small amount of un­con­scious bias in any sys­tem can cre­ate a rip­ple ef­fect, a bit of an anti-lever­age point, that can im­pede progress.”

At CIBC’S board-ap­proved ex­ec­u­tive roles in Canada, 18 per cent are held by vis­i­ble mi­nori­ties. The lender aims for 22 per cent by 2022.

Na­tional Bank’s num­bers are re­flec­tive of its home base of Que­bec, where boost­ing fran­co­phone rep­re­sen­ta­tion in se­nior roles was a pri­or­ity for decades, spokesman Claude Bre­ton said. The Mon­treal-based lender spent the past 15 years try­ing to boost women and now aims to go fur­ther on vis­i­ble mi­nor­ity rep­re­sen­ta­tion, which stands at 24 per cent of its over­all do­mes­tic work­force.

“We’ve been grow­ing our pipe­line, and now rep­re­sen­ta­tiv­ity at the se­nior man­ager level of 14 per cent is close to mar­ket avail­abil­ity and is still pro­gress­ing well,” Bre­ton said. “With re­gards to ex­ec­u­tive roles, mar­ket avail­abil­ity strongly dif­fers be­tween Toronto and Mon­treal, more so when French is fac­tored in.”

Bank of Nova Sco­tia, which has sig­nif­i­cant op­er­a­tions in Latin Amer­ica, counts two of its top ex­ec­u­tives and two direc­tors as vis­i­ble mi­nori­ties, though such rep­re­sen­ta­tion in the over­all Cana­dian work­force slipped to 24.1 per cent in 2018 from 28.4 per cent two years ear­lier.

“The bank is mov­ing at all lev­els to ad­vance di­ver­sity and in­clu­sion through sev­eral im­por­tant ini­tia­tives,” Do­minic Cole-mor­gan, a Sco­tia­bank se­nior vice-pres­i­dent, said in an emailed state­ment.

Toronto-do­min­ion Bank ranks among Canada’s best for di­ver­sity, with mi­nori­ties mak­ing up 38.1 per cent of its Cana­dian work­force and 17.6 per cent of vice-pres­i­dent and higher roles. Three top ex­ec­u­tives in­clud­ing CEO Bharat Mas­rani are of South Asian de­scent, as is one in­de­pen­dent di­rec­tor on the board.

“To build our ca­pac­ity for in­no­va­tion and drive re­sults, we need to en­gage all back­grounds, skill sets and mind­sets to cre­ate value in a unique and in­clu­sive en­vi­ron­ment,” Girish Gane­san, global head of di­ver­sity and in­clu­sion at Toronto-do­min­ion, said in an emailed state­ment.

The lack of Black peo­ple in top fi­nan­cial jobs isn’t lost on De­land Ka­manga, who is Black and heads global mar­kets at Bank of Mon­treal. He said he has seen an im­pact from tar­gets and a hir­ing push that helped many — but not all — groups gain faster ac­cess to cor­po­rate Canada.

“Look how the de­mo­graph­ics have changed in the ’70s, ’80s and ’90s and look at the com­men­su­rate em­ploy­ment of those peo­ple — it’s been spec­tac­u­lar,” Ka­manga said in an in­ter­view. “The one group that’s been left be­hind has been Black.”

Ka­manga has been push­ing change and he’s op­ti­mistic: He’s on the lead­er­ship com­mit­tee for in­clu­sion and di­ver­sity and cochairs a group for Black em­ploy­ees, cre­ated af­ter Dar­ryl White be­came CEO in 2017. Mi­nori­ties hold 39 per cent of the Cana­dian jobs at the bank and more than a third at the se­nior man­ager level and above, de­spite hav­ing none at the top.

“I see peo­ple slowly start­ing to move up and I see that next level down, more and more peo­ple,” Ka­manga said. “I re­ally do think it’s time, be­cause the pipe­line is there.”

A lot of these com­pa­nies are go­ing to lose great tal­ent if they do not act ... they need those peo­ple who are stuck in mid­dle man­age­ment.

BRENT LEWIN/BLOOMBERG FILES

Equal­ity and cor­po­rate power have come to the fore in all facets of so­ci­ety, in­clud­ing at banks. At Canada’s Big Six banks and two ma­jor life in­sur­ers, only 10 per cent of top ex­ec­u­tive roles and eight per cent of non-ex­ec­u­tive board po­si­tions are held by vis­i­ble mi­nori­ties.

RYAN REMIORZ/THE CANA­DIAN PRESS

CIBC CEO Vic­tor Dodig is par­tic­i­pat­ing in an ini­tia­tive that aims to pro­mote Blacks in ex­ec­u­tive roles.

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