Royal Bank of Canada is raising its target for visible minorities in executive roles to 30 per cent while also boosting support for young people of colour and Black entrepreneurs. The new commitments comes as the bank’s chief executive acknowledged that systemic racism has been a blind spot in its efforts to promote diversity.
Initiatives announced on Monday by Canada’s largest bank include the new executive staffing target, which replaces the current 20-per-cent goal for promotions and new hires. RBC is also making anti-racism and anti-bias training mandatory for all staff, promising to make $100-million in loans available to Black entrepreneurs over five years and increasing its recruiting goal for summer internships to fill 40 per cent of spaces with candidates who are Black, Indigenous and people of colour (BIPOC), up from 30 per cent.
The new pledges follow a wave of protests against anti-Black racism that have brought widespread attention to issues of bias, inequality and the disadvantages faced by visible minorities. That has highlighted inequities across Corporate Canada, especially in companies’ most senior ranks, including at banks.
The outcry that has spread since the the death of George Floyd, a Black man killed by police officers in Minneapolis in May, spurred RBC to hold conversations with senior Black employees about their experiences. The stories they told – of everyday racism when shopping at stores, having their successes discounted, being afraid to disclose their race because they feared it would hurt their chances of being hired – were “eye-opening,” chief executive officer Dave McKay said.
“We never listened, really, as a society. I have to say maybe we didn’t listen close enough at RBC. And we have to do something about that,” Mr. McKay said in an interview. “When you have this type of systemic racism you can’t say your community’s healthy.”
Even at the bank’s Global Diversity Leadership Council, which oversees its inclusivity strategy and is chaired by Mr. McKay, “we were never sensitized to how serious the issue was,” he said.
On Monday, RBC also announced it is earmarking $50-million of funds to offer skills development and mentoring to 25,000 BIPOC young people. The funds were previously committed to its RBC Future Launch program, a $500-million program designed to help prepare youth for the workplace. The bank will also add diversity and inclusion objectives to its performance management process, and expanding its public disclosure on diversity efforts starting in 2021 to include racial and ethnic data in pay equity reporting.
A lack of good data is one challenge to confronting bias. RBC does not currently track race in its lending, for example, but will need to start collecting those data to ensure it’s meeting its loan target for Black entrepreneurs.
Current RBC statistics suggest that 37 per cent of the bank’s 85,000 staff are minorities and 1.3 per cent are Indigenous, according to 2019 figures. Among executives, 19 per cent are minorities and the bank hopes that number will rise as a result of its new executive hiring and promotion target. As it stands, none of the 10 most senior executive officers listed on the bank’s website identifies as a visible minority, though RBC’s chief auditor William Onuwa is Black, and reports directly to Mr. McKay.
The bank needs to be more deliberate about moving people of colour into key roles that serve as staging grounds to reach the bank’s most senior jobs, Mr. McKay said. “We have a plan, and it will change,” he said.
Direct comparisons with other banks are difficult, as data are not reported consistently. At Toronto-Dominion Bank, visible minorities represented 38 per cent of all staff and held 18 per cent of senior management roles in 2019, but the bank doesn’t publish specific representation targets. Nearly 24 per cent of employees at Bank of Nova Scotia were visible minorities last year, while Bank of Montreal said minorities currently occupy 34 per cent of senior roles. Canadian Imperial Bank of Commerce says 18 per cent of board-approved executive roles are held by visible minorities, and has a target to reach 22 per cent by 2022.
Pressure has been mounting on large companies to take action on diversity not only in their own ranks, but to fight racism by using their clout to help bring about wider social change.
Last week, RBC and other large Canadian banks announced they would pause all paid advertising on Facebook and Instagram for July, in step with international business boycott of Facebook Inc.‘s ad business by hundreds of companies. The movement is led by U.S. civil-rights groups including the Anti-Defamation League, and aims to put pressure on Facebook to do more to combat racist and hateful content on its platforms.
To make sure RBC’s latest push for diversity lasts, Mr. McKay has asked Black and Indigenous leaders at the bank to tell him directly whether the plan stays on track. “We have to create a safe environment to speak up and hear if we’re not making the change,” he said.
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