Companies show little progress on diversity a year after committing to BlackNorth Initiative

Open this photo in gallery:

A vast majority of companies that made a high-profile public commitment last July to combat anti-Black systemic racism by boosting diversity within their ranks and elevating Black people to leadership roles have shown little or no tangible progress in meeting those goals a year later, a Globe and Mail analysis has found.

The companies are signatories of the BlackNorth Initiative, created by Bay Street entrepreneur and philanthropist Wes Hall last summer at the height of Black Lives Matter protests across North America. The initiative challenged CEOs to tackle systemic racism over five years, primarily by hiring more Black people and elevating existing Black employees to senior leadership roles.

At its launch on July 20, 2020, 209 companies – including corporate heavyweights such as Rogers Communications Inc., Air Canada, Bank of Nova Scotia and many more – signed on to the initiative.

But a year later, a Globe survey of responses from 105 of the 209 companies has found a substantial number of them have neither increased the number of Black employees in their work force nor elevated Black people to executive roles or to the board level during the first year of the commitment.

Many of the signatories say they did not track data on race prior to this past year, so could not demonstrate whether they have come closer to the goals set out in the initiative.

Just a handful of companies that provided data to The Globe – 15 in total – had more Black employees this year compared with a year ago, and a similar number reported increased Black representation in their executive and board ranks.

About half of the companies did not respond to The Globe’s questions on any progress they have made since signing the BlackNorth pledge.

Black entrepreneurs in Canada facing systemic racism and other barriers to success, new study finds

The results of the survey reveal the extent to which companies and institutions can make public commitments to progressive causes much faster than achieving meaningful, concrete results.

A majority of companies that responded said they have made significant headway on creating diversity and inclusion committees and plans, but those processes have not yet led to substantial changes in the diversity of the work force.

“I would like to see companies make quicker progress, but I also recognize the fact that you cannot turn this around immediately,” Mr. Hall said in an interview about the survey results. “It really just shows how bad the problem is to begin with.”

And Mr. Hall is already getting frustrated. “I am insulted when people say to me that we can’t find capable Black people in this country to serve in high positions,” he said. “They are all there, but they are stuck at these middle-management positions that go nowhere, and there’s nobody telling them, ‘We’re going to fight to elevate you.’”

Mr. Hall organized and founded the BlackNorth Initiative in the aftermath of the murder of Minneapolis resident George Floyd by a white police officer last May. He soon engaged the participation of a slew of prominent Bay Street business leaders, including Prem Watsa of Fairfax Financial and Victor Dodig, chief executive officer of Canadian Imperial Bank of Commerce.

Mr. Floyd’s murder and the protests that followed sparked a belated reckoning on race within the corporate world. The upheavals prompted company heads to at least outwardly question their own role in perpetuating systemic racism, and acknowledge too little had been done to diversify their work forces, C-suites and boardrooms.

In Canada, a flurry of companies issued statements professing their commitment to combat racism and promising to do better. Within weeks of launching to significant media fanfare on July 20 last year, the initiative had more than 300 signatures, morphing into the pre-eminent racial justice cause Corporate Canada chose to associate itself with.

The initiative sustained momentum over the rest of the year, with more than 450 companies, including Bay Street law firms and accounting firms, large insurers and three of the Big Five banks counting themselves as allies to the cause.

Companies that signed what Mr. Hall calls the “CEO Pledge” committed themselves to seven goals, many of them quantifiable ones. For example, signatories vowed to have Black leaders in at least 3.5 per cent of executive and board roles by 2025, a target that corresponds to the overall percentage of the Black population in Canada.

Companies also committed to a goal of hiring at least the 5 per cent of the student work force who are Black, and to devote at least 3 per cent of corporate donations and sponsorships in initiatives that would “create economic opportunities in the Black community,” both by 2025.

Equally significant, however, were the non-numeric goals: ensuring “no barriers exist to prevent Black employees from advancing within the company,” implementing training about unconscious bias and setting up diversity councils, as well as collecting data on race and ethnicity in order to “develop and advance Black people” within organizations.

Although 473 companies have signed the BlackNorth pledge to date, The Globe surveyed just the 209 original signatories to assess their progress after a full year. The Globe is also a signatory, committing to the initiative last Nov. 25.

A series of 18 questions, mostly based on the seven goals outlined in the pledge, were sent to the 209 companies. They included queries about how a company’s proportion of executive and board roles has changed to include Black people since last July 20, whether companies track data on race and ethnicity, and the percentage of a company’s work force that was Black before and after signing the pledge.

The Globe also questioned companies on the diversity of their employee base more broadly, in line with the spirit of the BlackNorth pledge, which ultimately aims to encourage organizations, at all levels, to become more diverse.

Among the key findings of The Globe’s survey:

• 100 companies declined to participate and four others could not be reached.
• 26 of the 105 companies that responded (or 12 per cent of the 209 initial signatories) either increased the number of Black board members or had already surpassed the 3.5-per-cent target outlined in the pledge even before signing the pledge. They included CIBC, National Bank of Canada, Sheridan College, Cisco Systems Inc. and Sobeys Inc., among others.
• 16 of the 105 companies (or 7.7 per cent of the 209 initial signatories) increased the number of Black executives in their ranks. Most of these companies defined “executives” as employees with a vice-president title or higher. They included companies such as CIBC, Bank of Montreal and the construction giant EllisDon.
• 15 of the 105 companies (or 7.2 per cent of the 209 initial signatories) increased the number of Black employees over all in the past year. They included some of the biggest pension funds – Canada Pension Plan Investments and Ontario Teachers’ Pension Plan – as well as Wealthsimple Inc., BMO, CIBC and the Canada Mortgage and Housing Corp.
• 27 of the 105 companies (or 12.9 percent of the 209 initial signatories) increased the overall number of employees that identified as Black, Indigenous and people of colour (BIPOC). Again, many of the pension funds and banks were part of this list, as well as Maple Leaf Sports and Entertainment, Hydro One and Caldwell Partners Inc.
• 47 companies that responded said they did not track the number of Black employees before signing the initiative, and 34 of those companies have yet to start as of July, 2021. Sixty-five companies did, however, track more general data on diversity, counting the number of women and visible minorities in their organization.

Mr. Hall said he was disappointed so many companies chose not to reply to The Globe’s survey, saying they should not be afraid to share their data with the public, even if it means they are not close to reaching the goals they committed to in the pledge.

“The question is, are companies afraid to share their data because they are doing a lot worse now? Look, you made a commitment to your own employees and a public commitment to the Black community. It’s done. So we expect that everyone who made that commitment will live up to it, and we hope they did not just sign the pledge for show,” he said.

Multinational giants such as Coca-Cola Co. Canada and Adidas Canada all took bold stands in support of the Black Lives Matter movement and signed the BlackNorth pledge last summer, yet both companies declined to provide The Globe with any information on what they were doing to actually create change within their organizations.

When signing the BlackNorth Initiative last summer amid an uproar over racism within his own company, Corus Entertainment Inc. president and CEO Doug Murphy promised “no barriers” would exist in preventing the company’s Black employees from advancing.

Yet when asked by The Globe, Corus declined to provide data on how many Black employees it had and how many were promoted in the past year. There are no Black people on the company’s board and at its executive level.

Of course, some companies have made significant strides on diversity, although not necessarily in terms of actually increasing diversity within their work forces, but putting in place a plan or process to hit targets.

BlackNorth itself, which has fewer than five staff members, conducted its own survey this past month to assess the progress its signatories had made one year on. The organization collected data from 182 signatories that voluntarily participated in a series of surveys between November, 2020, and June, 2021.

The initiative’s survey found more than 50 per cent of respondents had made significant progress on goals such as setting up a diversity leadership council, conducting training on unconscious bias and organizing forums to encourage dialogue among staff. But many organizations struggled with tangible goals such as finding suppliers from companies owned by Black Canadians and, ultimately, increasing representation at the leadership level.

Many also said they are struggling to find Black talent to hire, and that makes Mr. Hall impatient. He said employers that came directly to BlackNorth for help with diversity efforts made progress on their goals. “The only reason why the pace is slow for some companies is they are not seeking help to make the change happen,” he said.

CIBC’s improvement, for example, was substantial – the proportion of Black employees in its work force rose from 3 per cent to 3.5 per cent, and the number of Black executives increased from 1 per cent to 3 per cent. The bank also raised the percentages of visible minorities and Indigenous people in its work force.

Sheridan College made headway as well. The proportion of executive roles held by Black employees improved from none a year ago to 11 per cent. The college also added two Black board members.

But several companies have expressed frustration about the clarity of commitments outlined in the pledge by BlackNorth and are concerned they could be penalized for not meeting annual targets when, in fact, they have committed to a 2025 deadline. Some companies that responded to The Globe, including Rogers and the real estate company Tricon Residential Inc., said while they have not made any progress in adding more Black people to their boards, they have until 2025 to do so and intend to meet that goal.

(Editor’s note: After answering The Globe’s questions about its board of directors in June, Tricon announced on July 13 it had appointed a Black woman to its board.)

Part of the difficulty, some companies argue, is directors have long terms, so fast changes are almost impossible.

Cannabis giant Canopy Growth Corp., for example, told The Globe it does not anticipate immediate changes to its board, but is in the “process of developing strategies to increase Black and BIPOC representation within executive ranks.” All of Canopy’s seven board members are white. One of its key leadership executives, who is not on the company’s board, is Black.

But the challenge to quickly improve diversity at all levels of the workplace, especially at the leadership level, is perhaps more insidious than simply abiding by the rigidity of company law. It forces employers to look back at traditional hiring practices, says David St. Bernard, head of client success and legal at Diversio, a Toronto-based tech startup that offers artificial intelligence-based services to help corporations track data on employee diversity.

“We tell clients this all the time: If you recruit from the same pools, you’re going to get the same kind of candidates. If you use the same referral sources, you’re going to get the same demographic that you always have,” Mr. St. Bernard told The Globe.

As for the frequent complaint from companies that they cannot find diverse people to hire, Mr. St. Bernard said Diversio’s data show there are always candidates of colour suitable for senior positions, but they are just overlooked for those positions or not contacted by companies at all.

For Mr. Hall, the tokenization of Black candidates for senior jobs is not only a deterrent to attracting diverse applicants, but it also discourages them from staying in those positions.

“There’s an attitude amongst white business leaders that they are doing people of colour a ‘favour’ by bringing them into an organization at such a high level. They’ll maybe bring in one non-white or Black person,” he said. “Now, why would I, as a Black man, want to subject myself to that environment, where every single person around that table – which I could run circles around, by the way – does not look like me, and wants me to prove myself like I’m some performing clown?”

A significant number of companies that responded to The Globe’s survey indicated they simply did not track detailed demographic data of their employee base until they signed the BlackNorth pledge. This lack of data proved to be one of the key challenges even for companies that acknowledged they had a diversity problem.

Approximately 45 per cent of companies that responded to The Globe – even large ones such as Manulife Financial Corp. and Ontario Power Generation Inc. – said they simply did not have the breakdown of employee data by race. Many companies, however, said they have started gathering this data in line with one of BlackNorth’s goals, which calls for all signatories to collect data on race and ethnicity, including from Black employees.

Under the Canada Employment Equity Act, employers in federally regulated industries such banks, Crown corporations and others that have more than 100 employees are obligated to track data on four disadvantaged groups: women, visible minorities, Indigenous people and people with disabilities. But those categories were created when legislation was introduced in 1985 and have not been updated since, meaning employees who identify as Black or LGBTQ get lumped into a broader data set or are not categorized at all.

According to Sonia Kang, the Canada Research Chair in Identity, Diversity and Inclusion at the University of Toronto, most companies have not voluntarily sought more granular data on race because they felt they did not need to and that it would lead to intrusive questions for employees.

“It’s not shocking that people do not want to voluntarily identify as Black or Indigenous or South Asian, because they feel that it will be used to discriminate against them,” Ms. Kang said.

One way companies could encourage more employees to self-report their race or ethnicity, Ms. Kang says, is to create a climate in which people feel safe disclosing their identity, without fear of being stigmatized, stereotyped or discriminated against in any way.

“Companies have not treated diversity and inclusion initiatives as a real organization problem. You need to track it in the same way as you do any kind of numerical company goal,” she said.

Where companies have made significant progress in just one year has been in the creation of diversity and inclusion committees tasked with creating strategic plans on meeting diversity and inclusion goals. Just 18 companies either did not respond specifically to whether they had a strategic diversity and inclusion plan in place, or said they did not have one.

Ms. Kang’s research on organizational behaviour in companies shows diversity committees tend to be staffed and led mostly by people from underrepresented groups who are often middle managers, and do not have decision-making power.

“It calls on marginalized groups to solve the problem of their own discrimination. So a lot of these diversity committees go nowhere because they are not taken seriously by company leaders,” she added.

Her views are emphatically echoed by Mr. Hall, who said while the creation of diversity committees indicates progress, it is imperative the upper echelon of company officials are members and actually participate in diversity meetings in order for tangible change to take place.

“That’s why I made this a CEO pledge,” he said. “The CEO needs to run the project, otherwise it’s simply not going to work.”

Mr. Hall is acutely aware of the marked disparity between the speed at which Corporate Canada publicly embraced the BlackNorth cause and the pace of actual change when it comes to diversity.

“There are companies that are really working very hard to change things, and didn’t just sign the pledge because it was the trendy thing to do at the time. But how do we make sure everyone follows through on their commitments? They have to really believe, like some already do, that an increase in diversity is an increase in profits. That a more diverse company is, ultimately, a more successful company.”

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.