RBC CEO says bank has hit the high water mark on loan loss provisions
TORONTO -- Royal Bank of Canada is looking to diversify its workforce with a number of changes aimed at building a more inclusive employment pipeline.
The Toronto-based bank unveiled on Monday a least a dozen measures, which include upping staffing targets for executives identifying as Black, Indigenous or people of colour to 30 per cent from 20 per cent.
RBC will also make anti-racism and anti-bias training mandatory for all employees, offer at least $100 million in small business loans to Black entrepreneurs over the next five years and make diversity and inclusion objectives part of performance management goals for its leaders.
Chief executive Dave McKay said the plan came from the bank's ongoing conversations around systemic racism and "listening" sessions with employees that are Black, Indigenous or people of colour.
"To hear their stories...about what they experience day to day in their lives, how they talk to their families and their children about living in our society and the workplace, it's quite shocking. You have to address it when you hear it so clearly," McKay said in an interview.
"We came to the realization that we really didn't understand what was going on. We didn't understand the systemic racism."
The bank has long been striving to better reflect Canada's racial and gender makeup, but McKay said he knew there was more to be done after protests erupted across North America after the recent death of George Floyd, a Black man in Minneapolis.
In 2019, 1.3 per cent of RBC's employees based in Canada identified as Indigenous, while 37 per cent were minorities -- defined by the bank as people who are non-Indigenous and non-Caucasian in race or non-white in colour.
Minorities made up 19 per cent of the bank's executives and 39 per cent of those in middle management or more senior jobs.
RBC wants improve those results and is promising to include 40 per cent Black, Indigenous or youths of colour in its internship programs.
The bank will also allocate $50 million to programs focusing on skills development and mentoring for 25,000 youth from underrepresented groups.
Measures aimed at youth are important to McKay, who grew up in a lower-income family and got his own start at RBC from a school co-op program.
"I didn't have any connections, but I went to a school that allowed me to access that role and I think we've got to make that more accessible for the Black community," he said.
The changes revealed Monday come on top of a statement from the bank last month reiterating its commitment to diversity and inclusion and announcing donations to organizations doing anti-racism work. Canada's other major financial institutions have made similar moves.
To ensure the goals are met, RBC will expand its annual reporting to include more transparency around pay equity and ethnic and racial gaps.
It will measure annual internship and new hire goals for Black and Indigenous talent in Canada, the U.S. and the U.K. beginning in 2021.
Tracking such data is important because many experts say "what gets measured, gets done" and few Canadian companies make such numbers public.
Last year, The Canadian Press asked all firms included in the TSX 60 index as of Jan 1. 2019 to share data on how many women and employees who identify as visible minorities, as defined in the Employment Equity Act, worked at their companies in 2017.
Nearly 60 per cent, or 35 companies, did not provide or publicly release the representation of visible minorities in their ranks and more than 23 per cent, or 14 companies, said they were not tracking the metric at all.
McKay said Monday that he was intentionally bold and public with his strategy to promote diversity at RBC -- Canada's most valuable TSX-listed company -- because he believes the bank has a responsibility to inspire other businesses.
"Just setting the bar as Canada's leading company is important," he said. "It's important first and foremost, for all internal success metrics and making the change needed in our company, but it's also important to set an example for the community."
He promises the changes he announced won't be forgotten in days or months.
"This is not a one-time announcement. This is a part of an evolution," he said.
"We're going to continue to listen and we're going to continue to learn and we will adjust if we're missing the mark."