Like a lot of new CEOs, Gordon Nixon promised to make diversity a priority when he took the helm of Royal Bank of Canada. Right away, he created a diversity council.
But, nine years later, when other executives might have moved on to other things, Nixon remains committed. In fact, he still chairs the council.
"There's no reason a man can't do a better job of serving a female customer, or a Chinese Canadian can't do a better job of serving an East Indian customer," Nixon says. "But as an organization, we need to ensure that our makeup reflects the overall makeup" of the customer base. "It just makes good business sense."
Canada's largest banking company actively targets new immigrants, women entrepreneurs, Canadian aboriginals, the gay and lesbian community and people with disabilities. Nixon says the key to reaching these audiences is having a work force that mirrors their cultures.
Of the more than 21,000 people RBC has hired since 2006, 52% have been women and 26% have been "visible" minorities. It also actively recruits immigrants and has roughly 2,600 interpreters on call to help translate 180 different languages, including indigenous Canadian languages like Cree and Inuktitut.
With Canada becoming more ethnically diverse and the company itself expanding globally, RBC sharpened its focus in 2005, embedding objectives into its hiring and promotion practices to require that every slate of potential managerial candidates includes a woman, a minority or both.
The results of the initiative have been impressive.
Women now hold 40% of the executive positions at RBC, up from 35% in 2005, and minorities hold 14%, up from 5%. Perhaps most notably, three of the nine executives who report directly to Nixon are women, and two of them, the chief financial officer Janice Fukakusa and the human resources chief Zabeen Hirji, are minorities.
Its commitment to diversity has won the company acclaim. It is routinely honored as one of Canada's top employers, it's been named a "best place to work" for gays and lesbians and working mothers, and in 2008 it was recognized as having one of the most admired corporate cultures in Canada. In March, Catalyst Inc., a leading organization promoting the advancement of women in business, named RBC as one of its four award winners for 2010. (The others were Deloitte, CampbellSoup and the Australian telecommunications firm Telstra.)
All that's not to say that diversity trumps talent.
Hirji says that, while RBC has clear goals — the embedded objective is for half of all new executives to be women and 20% to be minorities — "we aren't going to put an unqualified person in a job."
What the company encourages is for hiring managers to think creatively.
Say, for example, a minority vying for a branch manager position in an ethnic neighborhood doesn't have the necessary technical skills for the job but speaks the language and understands the community's culture. For the hiring decision, department heads are urged to take into account such things as how much business the less-seasoned candidate can bring in.
"Financial services is a business of trust," Hirji says. "That's what you need to earn people's business." The technical skills, she adds, can always be taught.
RBC is also big on coaching. If promising female or minority candidates are passed over the first time around, they will often be paired with mentors who can assess their strengths and weaknesses so that they'll be better prepared the next time.
Fukakusa, the CFO, says mentoring programs are particularly important because they keep department heads focused on the company's diversity objectives.
"What gets measured gets delivered on," she says. "If we see people that are coming up short, we work to understand how to make them more competitive for these roles."
Nixon, who also co-chairs the Toronto Region Immigration Council, speaks often to business groups on the topic of diversity, and his message is consistent: hiring and promoting more women and minorities is not just the right thing to do, it is good business.
From a recruitment standpoint, Nixon says RBC's reputation for inclusiveness goes a long way toward helping the company attract top female and minority talent.
From a business development perspective, he says a motivated work force leads to better customer service, and better service leads to improved financial performance.
John Taft, RBC's head of U.S. wealth management, adds that many customers simply want to give their business to firms that reflect their values — from which charities they support to whether they pay benefits to gay partners.
"High-net-worth individuals, family foundations, they care a lot about this," Taft says. "If you don't do diversity well, they won't give you their money."
