Downtown office buildings Toronto

Financial firms across North America committed to combating racial injustice in the wake of George Floyd’s murder by Minneapolis police officer Derek Chauvin. Where do things stand a year later?

“In this past year, there’s been more awareness and more focused attention — I’m thinking about the BlackNorth Initiative — [for firms] to speak specifically about changes they will implement in the next four to five years,” said Nova Scotia Senator Wanda Thomas Bernard, a member of the African Canadian Senate Group.

The BlackNorth Initiative’s pledge — which requires signatories to commit to Black people holding at least 3.5% of executive and board roles based in Canada by 2025 and to hiring at least 5% of its student workforce from the Black community — now has nearly 500 signatories, including dozens from the financial industry. BlackNorth’s directors include the CEOs of CIBC, Fairfax Financial Holdings Ltd., Mackenzie Inc. and Scotiabank.

“What makes [a difference] is when institutions make a decision to address and deal with anti-Black racism: first off acknowledging that it exists, and then developing specific strategies to address it,” said Thomas Bernard, who co-sponsored a survey of 342 Black entrepreneurs that found anti-Black systemic racism creates widespread barriers to wealth creation.

“Many banks have diversity and inclusion plans. But how well are they really being integrated in all aspects of the organization? What are the targets? How are they being measured? Where’s the accountability?” she said. “We need to make sure the checks and balances are in place to ensure that industry is removing barriers.”

To help answer some of those questions, Investment Executive reached out to the 20 asset managers, banks and insurers we spoke to in 2020 to check on the status of their commitments.

Setting and meeting goals

Of the 20 firms, 11 have signed the BlackNorth pledge. Many praised the support, resources and networking the initiative provides.

“BlackNorth offers a strong peer mentoring circle,” said Brent Chamberlain, associate vice-president of inclusion and diversity with CIBC, adding that his circle meets monthly. “We can only solve anti-Black racism in partnership with other organizations.”

Two of the Big Six banks — TD and RBC — had not signed the pledge at press time.

Girish Ganesan, global head of diversity and inclusion with TD Bank Group, said the BlackNorth Initiative’s “goals, philosophy and stance align with TD very well. [But] we are answerable to our U.S. colleagues, and BlackNorth is Canada-only.” TD intends to double its representation of Black executives by the end of 2022 and increase minority executive representation across the bank by 50% by 2025.

In February, RBC CEO Dave McKay told the Toronto Star the bank had not signed the pledge because it wanted to “first focus on the commitments RBC had already made.” RBC, which did not respond to interview requests, has set a goal for 30% of its executives to be Black, Indigenous or people of colour (BIPOC), “with a focus on increasing Black and Indigenous representation.” No deadline was provided.

Raymond James Canada has signed up for the 50-30 Challenge, which asks that organizations “aspire to” 50% women and 30% underrepresented groups on Canadian boards and in senior management.

All 20 firms were invited to share examples of progress made since 2020.

Those that responded pointed to initiatives such as improved education and training, particularly around the histories of Black and Indigenous communities; donations to and partnerships with organizations supporting underrepresented communities; targeted recruitment efforts; BIPOC advisory councils and employee groups; mentorship programs for BIPOC staff; days devoted to reflection; and facilitated conversations about racism among staff.

Some banks have taken specific action to address bias in customer service, and several firms, including all Big Six banks, include diversity and inclusion criteria as a formal component of C-level executive compensation.

Quantifying progress was difficult, especially for firms that set their goals less than a year ago (see box, “Progress check-in”). While more than half of firms in our sample track diversity data, with several reporting data quarterly at the board level, most said it was too early to share progress. Goal achievement deadlines ranged from annually to 2025.

Chamberlain said CIBC is closer to meeting its goal of having 4% of board-approved executive roles held by a member of the Black community by the end of 2023. “Last year we went from 1% to 3%, and that figure includes our chief legal officer [Kikelomo Lawal],” he said.

Michelle Taylor-Jones, vice-president of global diversity, equity and inclusion with Manulife, said that 52% of new graduates hired in 2020 were BIPOC, double the goal of 25% set a year earlier.

Lessons learned

As firms implemented their diversity and inclusion strategies, they picked up lessons along the way.

Chamberlain said that CIBC has learned to be more explicit when enumerating its goals: instead of setting blanket representation targets for visible minority groups, the bank decided to be “clear and concise around the goals for underrepresented groups like members of the Black community.”

Crystal Hardie Langston, chief diversity officer with The Vanguard Group, said her firm has also taken care with language.

“A person is not diverse; a team is diverse,” she said. “We’re so quick to use ‘diverse’ to describe a woman or a person of colour, and that excludes white males who are part of diverse teams. It also ‘others’ women and people of colour. There’s a vernacular shift that we’re trying to get people to relearn.”

Langston said that framing her firm’s efforts in this way has allowed all employees to contribute to a more inclusive workplace.

“We are unapologetic about our representation goals and [the fact] that they are focused on underrepresented populations,” she said. “But our inclusion goals are for everyone.”

(Vanguard’s goals are not public, but Langston said they aim for “proportionate representation at every leadership level.”)

Regina Curry, chief diversity officer with Franklin Templeton, also spoke to issues of framing. “Overall, we are reframing [diversity and inclusion] as a business opportunity to contribute to meeting our strategic, innovation and performance objectives — not as a problem to be solved,” she said.

Franklin Templeton tracks ethnic minority data for its U.S. division, and a spokesperson said the firm is working on capturing data in Canada and elsewhere.

Leaders were cognizant, however, that some employees could be experiencing “diversity fatigue” as a result of their firms’ efforts during the past year.

“For centuries we haven’t talked about race and anti-racism, and all of a sudden it’s hitting you left, right and centre,” Ganesan said. “Had [the lessons] been bite-sized over the years, that wouldn’t be the case.”

Ganesan said that he counsels colleagues to learn about the issues facing underrepresented communities, but to focus on learning deeply about one or two areas. “If your passion lies within a certain area of diversity, double down on that,” he said. “But don’t close your mind to other issues that are going on so at least you’re aware and educated.”

Langston recommended weaving inclusion into everyday processes so that it doesn’t feel like a separate item to address.

Chamberlain agreed. “It’s about doing the work you’re already doing, but differently,” he said. “So it could be thinking harder about that hiring decision. How can you create a larger professional network that includes people who don’t look like you or share the same experiences as you? Then when you have a hiring decision in the future, you have that network to draw from.”

Real change?

Interviewees used words like “inflection point” and “sea change” to describe the racial justice reckoning of 2020. Are things really different this time around?

“The difference is our employees are going to keep us accountable. Our communities, our customers and our shareholders are going to keep us accountable,” said Manulife’s Taylor-Jones. “When you talk about embedding this work within the lifecycle of an organization, as we have done, it will take some time to see significant change and growth.”

Shareholders have used their clout to influence change. For example, following a shareholder proposal that was subsequently withdrawn, BlackRock Inc. committed to performing a racial audit of its operations in 2022. Several Canadian banks received proposals regarding board diversity targets.

And in May, TMX Group Ltd. shareholders voted 98% in favour of a shareholder proposal on Indigenous inclusion and reconciliation — a proposal TMX supported. (Read this article on what reconciliation looks like in an investment context.)

Senator Thomas Bernard said she’s encouraged by the public commitments organizations have made.

“I remain cautiously optimistic about the potential for systemic change to really take root this time. [Nonetheless], there’s a voice constantly at the back of my mind saying, ‘We have to make sure these decision-makers and policymakers are held accountable,’” she said.

“There’s a risk of performative change happening — and that’s not long-lasting. But we need long-lasting, systemic change. One of the ways we can help push for accountability is by keeping [racial justice] at the top of the agenda.”

Progress check: Tracking diversity data

Last July, BMO, Edward Jones, Raymond James and Scotiabank indicated they had just started — or would soon begin — tracking their percentage of BIPOC employees.

BMO completed its analysis and in September 2020 released inclusion goals with a 2025 deadline. These include representation in senior leadership roles (3.5% for Black employees and 31% for people of colour in Canada) as well as in the broader workforce.

“These are goals that will be reviewed, ongoing, by the bank’s performance committee,” said Rebecca Tascona, regional president, Ontario region with BMO Private Wealth.

Tascona added that within BMO Private Wealth, inclusion performance objectives are “part of every manager’s performance plan.”

In a statement, Edward Jones said it was implementing a strategy to track workforce diversity, as well as continuing and expanding its existing initiatives.

Raymond James is analyzing the data from its survey.

“We’ve been slow on some of our responses, but I think that’s been the right choice,” said Janine Davies, vice-president and executive director with the Raymond James Canada Foundation in Vancouver. “We have a very engaged advisor population and corporate employees, and sometimes they have different opinions. To get unison is sometimes difficult, but ultimately we push ahead.”

Scotiabank had run diversity surveys before, but “we didn’t have great data,” said Dominic Cole-Morgan, senior vice-president of total rewards with Scotiabank. Last summer’s survey had “a really good response rate, but we had to do a lot of communications telling people what we were using the data for and why,” he said. “There’s a bit of a contract: ‘I’ll give you this data; I’m expecting to see you do something with it.’”

Scotiabank used the data to set inclusion goals, which were released in November 2020 with a 2025 deadline. The goals include representation in senior leadership roles (3.5% for Black employees and at least 30% for visible minorities) as well as in the broader workforce. Cole-Morgan said the bank will “refresh its data” toward the end of 2021.

Read our companion story on how banks are addressing anti-Black bias in customer service.