Often, when male executives are asked why they champion gender equality in the workplace, they look to the women in their lives.
They think it is important because they want their daughters or granddaughters to be treated the same way as their sons or grandsons, for instance.
Those are great reasons, says Bill Downe, CEO of Bank of Montreal, but that is not what motivates his desire to create a more equitable environment within his bank. It is much more fundamental, he says, and related to the core principles of the 200-year-old bank he leads.
“It ties into the brand of the company,” Downe says. “You can talk to retired employees in their 90s, and when you asked them what the bank stands for, they’ll say it stands for honesty and fair dealing.”
Downe was recently in New York to receive an award from Catalyst, an organization that advocates for the advancement of women in the workplace; Downe is also on the board of Catalyst. He spoke with American Banker at the bank’s Times Square office about diversity, inclusion and other topics.
The following is an edited transcript of that 50-minute conversation.
You’re in town to receive a Catalyst award, which recognizes efforts that help advance women in business.
BILL DOWNE: It is a bit of a landmark for us. We were the first bank in North America to be recognized by Catalyst in 1994, and now we are one of a very small list of companies to be recognized a second time. We really did some groundbreaking work around the glass ceiling that existed in our company in 1994. It altered the shape of our organization.
Five years ago as we looked out at our 200-year anniversary of the bank, we decided to examine every part of our corporate culture and factors for success. We asked ourselves if we were satisfied or if we had stabilized in our effort to have gender representation. We decided some form of renewal would be appropriate. We were running at about 33% gender representation. We changed the objective to 40% at all levels of senior management of the company, and we crossed that threshold in 2016.
Catalyst has a really in-depth evaluation process. They spent a lot of hours examining us. What did we set out to do? Why did it work? What were the dimensions? It is a great thing to recognize our 200th anniversary, [receive] the Catalyst award, [and ring] the New York Stock Exchange simultaneously. They all have something to do with what makes great companies endure, what makes companies resilient over the long term. What is the relationship between a set of beliefs and values and ultimately a return to shareholders that is appropriate?
So, how did you get from having 33% of senior management jobs held by women to 40%?
It involved an examination of what did we mean by diversity, and that forced us to examine the notion of inclusion. It was not possible to set gender-representation targets without dealing with race, ethnicity, disabilities, sexual orientation and, in the case of Canada, opportunity for indigenous people.
From there, we looked at what are the talent management systems in the bank that either impede or have the potential to ensure that the system is inclusive.
We began examining management succession in a more formal way — identifying three people who are capable of succeeding every person in a material position. Once you do that, you have to go through a process on a regular basis to keep it current. Now we have a cascade, or a pyramid, of talent roundtables. They start at the midlevel of the organization, and they roll up.
For every person there are three people who are judged to be capable of taking that position. If there are two blanks on the page, you have a short period of time to remedy it. You have to identify, train, recruit, develop, do something so you have succession. When you do that, you can look at every succession slate and say what are the characteristics of the slate? Do they have a balance with respect to gender, race or ethnicity? Are they accounting for a workplace that is constructive for people with disabilities?
Then we created a series of councils who are aligned with the leaders of businesses and groups within the pyramid. Their job is to help their management teams make progress. That created lateral opportunities for promotion and advancement that previously didn’t exist. It is a pipeline, and in a pipeline someone of great merit can miss out on great opportunities by waiting for someone else to move on.
A lot of the advancement has been a result of a willingness to move people between corporate functions. For instance, we moved our deputy general counsel and moved her to head of investor relations. She was a superb deputy general counsel and she didn’t know why she wouldn’t be the general counsel relatively soon. We asked her the age of the general counsel, and if is he doing his job well. The answers were he is not old and he is doing his job well. Unless you run over him with your car in the parking garage, you’re going to have to find another way to advance. The investor relations job was another way.
There is a phrase, "When you’re accustomed to privilege, equality feels like oppression." How do you unhinge the institutional patriarchy so there is room for everyone to achieve?
We sometimes confuse the protection of power and the desire to not lose control. By that, I mean in large organizations, people are often reluctant to see process change, and they are reluctant to have more people engage in the discussion, and certainly not more people unlike themselves, because they are worried they are going to lose control. If you can recast the conversation from the protection of control to an outcome, and you can convince people that if you bring in someone with a different perspective or point of view it is going to accelerate the path to reaching the objective, they might be willing to relinquish control.
It isn’t power, it is, "I don’t want things to change."
In the lateral moves, we’ve found that people go into new roles and they are uninhibited by the comfort of the current process. They are willing to dismantle part of the process because they are not attached to it. In return, they have to be able to convey to people a belief that the outcome — achieving a revenue growth objective, increasing the margin, increasing the customer base — can be done another way.
What about those who refuse to change?
It is the case that people opt out if they are not comfortable, especially if you’re really clear about the direction the company is heading in. We have some instances where people have said, “I’m afraid that if you create opportunity for people who have been historically marginalized, you’ll create less opportunity for me.”
You say to them, “Is that the kind of company you want to work in? Do you want to work in a company that protects the best opportunities for people just like you?” If their answer is yes, the next question is, “Are you in the right place?”
Many women of color believe that diversity programs have favored women and people of color to the exclusion of them. You construct your objective to increase the representation of women, you construct your objective to increase the representation of people of color, and that allowed me to choose a woman over a man in one category and man over a woman in the other.
One of our employees of 12 years asked me that question specifically: “Is there a problem around the opportunities for women of color?” I don’t have empirical proof, but I think there is. At Catalyst we are about to launch an initiative where CEOs of large corporations are going to commit to a series of building blocks around diversity and inclusion in the workplace that make sure that given the way the matrix is constructed that women of color are not disadvantaged.
Now, the woman who raised that question came to me after and said, “I’ve been promoted in the last three years, but in the prior 10 years, I did my job exceptionally well and people to the left of me and right of me were promoted, and it took me a decade to figure out that the only one who wasn’t getting promoted was a woman of color.”
We don’t have the answer. We moved our representation numbers from 5% to 33% over a 15-year period. We stabilized in the mid-2000s. Then the Great Recession came.
And you had a big acquisition with Marshall & Ilsley.
The big acquisition actually aggravated the challenge because representation numbers weren’t the same in the acquired company, simply because it was more regional. Wisconsin is more white than Chicago. So in 2012, we said what are we going to do by the bicentennial?
Why do you think BMO has succeeded in advancing a diversity agenda where others have stalled?
Where we’ve done better than we previously did is in the intersection of management and talent. It wasn’t simply a question of setting or mandating a number, but looking at the management of talent and the sources of talent. The example of breaking down the silo — it is complicated. People have to learn new disciplines. When you go vertical, you just have to learn to manage more people. When you go horizontally, it takes more time.
We have to create more mobility, more flexible talent management framework, and we have to think about opportunity. We are all going to be in a position where we are talking about more education and training.
What drove it home for you personally?
I don’t have an example like, “I have three daughters, and I want them all to have an opportunity.” But that’s a fair example someone would say.
For me, it ties into the brand of the company. You can talk to retired employees in their 90s, and when you asked them what the bank stands for, they’ll say it stands for honesty and fair dealing. It is in the DNA. When we talked about the business and the way we organized the company, we started talking about is it fair and is it right? Can you answer those two questions with regards to the product launch, the initiative you have or the way you’re going to market?
What do you think is the future of diversity and inclusion programs in the current political environment?
Without being political, if you have a belief system that you think has contributed to the success of your company, and the winds blow in one direction or the other that are not consistent with that, you have to reinforce.
An example is the passage of Dodd-Frank. It is complicated and was initially hard to follow. It was expensive. When you examine what the intent and the impact of Dodd-Frank was, aside from the cost of figuring it out and organizing yourself to comply, I find it challenging to find something other than a best practice at the heart of it.
Why were we not particularly inconvenienced by the mandates over the overdraft fees on debit cards? Because we had talked to most of our customers about an appropriate overdraft line, so if they overdrew they paid an interest rate, not a fee. In the pre-Dodd-Frank era, we made less money on those events than our competitors. In the post-Dodd-Frank era, the impact on our revenue was de minimis.
So, when I look at the vast majority of us, banks function with a fundamental moral compass that guides their behavior, and you can point to outliers because they were highlighted during the recession. But you can also point to a significant number of very well-run companies that may have struggled with the new implementation of a regulatory framework, but they weren’t on the wrong side of the basic principles. They could look at the intent of Dodd-Frank and say, “I don’t disagree with that.”