"Unlocking the Power of Diversity"
President & CEO
RBC Financial Group
The Women's Canadian Club of Montreal
October 18, 2004
Thank you for that kind introduction. I'm delighted to be here, and I would
like to thank Carol Fortier for inviting me to speak with you today.
In looking at the history of the Women's Canadian Club of Montreal, I was
impressed to see the names of so many prominent women, including your founders,
Lady Drummond and Elsie Reford - both names I know well from growing up in Montreal.
According to your records, these two women started the club in 1907 with a clear purpose
in mind: "to foster patriotism, to stimulate active work for the welfare and
progress of Canada, and to encourage the interest of women in the institutions, history
and resources of Canada."
Today, I would like to build on that tradition by addressing the subject of diversity,
an issue that I believe is fundamental to our definition of Canada, and to our
future prosperity as a nation. Now when I told my mother, who is here with us
today, that I would be talking about diversity, she looked at me with that expression
of fear that only a parent can have. She likely went to the dictionary to look
up the definition of diversity to see how it could be used as a topic for a business
Well, by the time I'm finished this speech, I hope you will agree that diversity is
an important topic for business and Canada. Important, because it can help transform
our country into a more cosmopolitan and interesting place to live. Important,
because it can help us attract and develop the best and the brightest people.
And important because diversity has the power to help us create a more competitive
and prosperous society for all Canadians.
Now I realize that - as a white, older male - I may not exactly look like a poster
boy for diversity. In fact, much of my career has been spent in investment banking,
which has a poor track record on this subject.
Fortunately, that is changing, but it has certainly been a long time coming.
Since becoming CEO of RBC Financial Group, I've been exposed to many things that have
helped shape my perspective on diversity. For example, I've seen the increasing
diversity of our workforce and client base - particularly in urban centres --
and I've witnessed how this has enriched our organization. Our staff is a microcosm
of Canada, and this diversity is helping us do a better job of serving the diverse
communities in which we operate. Simply put, taking advantage of diversity is
a great business opportunity for our organization.
The time I spent as chair of the 2002 United Way campaign in Toronto is another good
example. During my term, I had the opportunity to visit many agencies and see
first-hand how they were helping disadvantaged people in our society. When you
spend time talking with people across all parts of a major city, you realize how
many have an uphill struggle. The United Way does great work in preventing the
waste of human potential that occurs when society gives up on people, and when
people give up on themselves. But there is still more work to be done, and we
in the business community have more than just a responsibility to help do it;
we have an opportunity to benefit from it.
Tapping human potential is -- or should be -- one of the primary goals of every great
civilization. And Canada, as one of the most diverse nations on earth, has more
to gain from working toward this goal than virtually any other country.
Unlocking the power of diversity will enable Canada to become more competitive and dynamic.
As a nation, we compete with other countries around the world for talent, investment
and economic growth - and the stakes are very high. In the old economy, competitive
advantage was driven by capital assets like plants, equipment and machinery. In
the 21st century, it will come from human capital, and the more diverse we are
as a country, the more intellectual capital we will have to draw upon.
This is particularly important given the current debate around outsourcing. Many people
believe that the reason developing countries like China and India are growing
quickly and taking jobs away from developed nations is because of their low wages.
They are wrong. These countries are also investing heavily in technology, skills,
higher education and innovation so they can also compete based on intellectual
capital. For example, India has become an international centre for software development.
And China is graduating 160,000 computer engineers every year as it charts its
long-term plan to become a global economic powerhouse.
To compete with these nations, we must keep building our intellectual capital. In
a nation as small as Canada, we simply cannot afford to overlook talented and
smart people because of gender, ethnic origin or other differences. From a business
perspective, diversity is one of our greatest competitive advantages in growing
our intellectual capital and ensuring our ability to compete.
This challenge becomes even more critical as the face of Canada continues to change.
One in five Canadians today was born outside the country. The percentage of visible
minorities in our population has tripled during the past two decades. Five million
Canadians identify a language other than French or English as their mother tongue.
And the pace of change, if anything, will accelerate. Canada's goal is to welcome
300,000 new immigrants each year, or about one per cent of our existing population.
To understand the need for that level of immigration, just look at some of the major
demographic trends that are shaping our society. Since the early 1970s, the birth
rate in Canada has fallen far below the level needed to sustain our population.
And that well-known demographic group -- the baby-boomers -- is steadily moving
Immigration gives us a unique opportunity to revitalize our society, to welcome new ideas
and to acquire new energy. Some people fear the impact of immigration, but it
has been a source of strength for Canada in the past. However, world history has
shown that there's no guarantee diversity, in and of itself, will be a positive
Unlocking the power of diversity does not occur spontaneously. It requires a
concerted effort by every sector of society, including a leadership role by the
business community. Perhaps most important and most difficult of all, it requires new
ways of thinking.
However, as Canadians contemplate the significant change that will occur to our
demographic makeup in the coming years, we can take genuine comfort from our success in
welcoming wave after wave of immigrants in the past.
I'm not suggesting for a moment that our record as a nation is perfect - particularly
with regard to Canada's original peoples. But for the most part, and with some
notable exceptions, these waves of immigrants have been successfully embraced
into the mainstream of Canadian society.
More remains to be done. There is evidence that we are becoming less adept, not more,
at fully integrating new Canadians into the economic life of this country.
A recent Statistics Canada report found that our most recent immigrants had higher
levels of education than their Canadian-born counterparts. Yet, many more are
working in jobs below their level of education and earning less than those born
in Canada. And they experience higher unemployment rates. If human capital is
today's most important business asset, this is truly a missed opportunity.
In the past, these gaps in earnings and employment were eliminated over time,
but recent evidence suggests they are no longer disappearing as quickly as they once
Clearly, we need to do more to identify and remove impediments to full participation in
the economic life of this country. And not just for new Canadians. It needs to
be done for all those who have felt the frustration of "sticky floors"
that initially limit their opportunities for advancement or the "glass ceilings"
that block their access to the senior levels of an organization. If we fail to
remove these barriers, we will have failed not only the newcomers to Canada, but
those who were born and raised here as well.
The challenge of capturing the enormous potential of our diverse society is not something
that any one group, or government, or sector can achieve on its own. But it is
clearly an area where the business community can, and must, play a leadership
At RBC, this is a responsibility we take very seriously. Not just because it's the right
thing to do. But because, as I said earlier, it's good for business. Our goal
is to create an inclusive organization where differences are valued and where
all employees can realize their potential and fully contribute.
We believe that if we have an excellent reputation for valuing and leveraging diversity,
we will be able to draw from a deeper and wider pool of talent. New Canadians
now account for about 70 per cent of the growth in the Canadian labour force.
By 2011, it is expected they will account for all the growth in our workforce.
Once those candidates become our employees, we believe a strong commitment to diversity
will enable us to retain them in our organization and to maximize their potential.
We also believe that a diverse workforce will help us develop better products and
services for an increasingly multi-ethnic, multilingual customer base. And we
believe that this workforce will be able to devise more creative, effective solutions
to the challenges that will undoubtedly be presented by the rapidly changing competitive
environment of tomorrow.
That's why "Diversity for Growth and Innovation" is one of our five core values.
Our diversity initiatives at RBC have gone through three distinct stages.
The first stage, which should resonate well with this audience, was to create better
job opportunities and career growth for women. It's not surprising our focus began
here when you consider the relatively large number of women working at RBC since
the Second World War. This was reinforced by the structural changes that were
occurring in society, with increasing numbers of two-career and single-parent
It also makes sense when you consider that women influence 80 per cent of consumer
decisions. And that Canada has the highest number of women entrepreneurs per capita
in the industrialized world. And that women hold an ownership interest in about
half of all small businesses.
Not that our messages to women were always bang-on. I'm sure some of you remember
"Mary" from the Royal Bank, who was the star of our advertising in the
1960s and early 1970s. Mary was the perfect bank teller and typified many things
about that era - including gender stereotyping.
In one of our advertisements, Mary was kneeling before an imposing-looking male in
a prominent photo with a caption that read: "Can I get you a cup of tea,
And so it was that Laura Sabia, a champion of women's rights and coincidentally the
mother of Michael Sabia, stood up at a Royal Bank annual meeting in Montreal and
said - these were her words: "Please take that idiot Mary off the television!"
She also challenged us about why we had so few women in management and no women
on the board.
Well, things started to happen pretty quickly after that. Mary was retired. The Royal
Bank chairman of the day launched a task force on Women in Management. Our first
woman director joined the board of directors in 1976. Our first woman executive
was appointed in 1979, the year I graduated from university. Now when I graduated,
50 per cent of my business class were women; yet, the biggest bank in the country
was appointing its first female executive. Looking back at it today, it's quite
incredible that we were so slow to seize such a great business opportunity. Fortunately,
since then women have moved relatively quickly and steadily into senior positions
throughout the organization.
Currently, women make up about one-third of our management ranks in North America, and
it's a number we are working hard to increase. In this regard, I'm sure many of you
are aware that we recently appointed Barbara Stymiest as our Chief Operating Officer.
As COO, Barb will have many of my top management team reporting to her, including
the Chief Financial Officer, the head of human resources, and our Chief Auditor
who are also women. We have certainly made progress at RBC, but just think about
the opportunity we would have missed if we hadn't taken a pro-active approach
to advancing women. This same opportunity exists for every organization.
The second stage of our diversity program was a commitment to all
employment-equity-designated groups - not just women, but visible minorities,
persons with disabilities and Aboriginal people. This was triggered by the enactment of
employment-equity legislation in the 1980s. But it was given much greater emphasis at the
senior management level in the mid-1990s with the development of a formal diversity
strategy and the establishment of a "Diversity Business Council." We are
working hard to advance people from the designated groups, but we are not as far along
there as we are with women.
This is a challenge for everyone in the business community. According to a study by
the Conference Board of Canada, visible minorities are not well represented in
key decision making positions in Canadian companies. In fact, only three per cent
reported having a visible minority as a CEO, and less than two per cent of public
companies had visible minorities on their boards. This is a challenge that must
The final stage of our diversity program - and this is an area where we still have
the farthest to go -- is a commitment to diversity of thought.
Most organizations -- particularly large ones with a long history - tend to develop
a distinct corporate culture. That is not a bad thing. But we need to ensure that
our corporate cultures are able to embrace diversity, that they do not restrict
our openness to new developments, new ideas and new approaches to doing things.
We need to ensure that we are fully tapping the creative energy that a diverse
workforce, thinking in a diverse manner, can provide. This is our competitive
advantage in an increasingly competitive world.
As Richard Florida notes in his book "The Rise of the Creative Class" (which
I encourage all of you to read), corporations and societies depend increasingly
on talented, well-educated and highly creative people for corporate profits and
for economic growth. These are people for whom diversity of thought is exceptionally
important. If we cannot satisfy that legitimate need in our workplace and in our
society, such talented people will go elsewhere to find it.
In his book "The Global Me," Pascal Zachary argues that economic performance
is directly linked to a country's willingness to welcome new people from around
the world. This theory is supported by the Milken Institute, which identified
immigration as one of the two most powerful demographic trends reshaping cities
and regions in America, and by the University of California, which found that
immigrants had started 30 per cent of new businesses in Silicon Valley since 1995.
In my view, the same is true for Canada. As I have traveled across our country, I've
been impressed by the number of entrepreneurial companies that have been started by
first-generation Canadians. They have brought a wealth of creativity and ideas to
our country, and their vitality is helping to create jobs and drive economic growth. So if
we want Canada to grow and prosper, we need to attract our share of immigrants
by making our cities more attractive and welcoming places.
The onus is on us as business leaders, to push forward toward this final frontier
of diversity - to create a work environment where diversity of thought will be
To achieve our diversity goals, RBC has developed a comprehensive strategy that's
built not just on principles of equality, but also on creating competitive advantage. It's
too wide-ranging to review with you fully today, but I would like to mention a
few of its key elements.
The first element is commitment from the top. In my role as CEO, I chair our Diversity
Leadership Council, which is made up of executives and senior leaders from across
our various businesses.
Our group is responsible for establishing RBC's overall strategy for diversity and
employment equity, as well as setting goals and monitoring progress. At our quarterly
meetings, we pay particular attention to talent management - making sure the talent
pipeline is being filled with qualified candidates from diverse groups, as well
as carefully tracking the diversity of our recruitment efforts, promotions and
In addition, senior executives have assumed the role of champions for a number of
client and employee groups, including for women, visible minorities, Aboriginals and
persons with disabilities.
A second element of our strategy is establishing clear goals, measurements
and accountabilities. You're all aware of the business maxim: "What gets measured
That's why measuring the ongoing results of our diversity efforts is an important part
of our overall strategy. We actually have targets with respect to diversity and each one of
our business units has its own goals and diversity plans. We have
also built accountability for diversity results into our performance-review process.
Another key element is the creation of a work environment that appeals to the needs of
a diverse employee population. One example is the wide range of options we offer
to help employees balance their approach to "Work and Life." These options
include flexible hours, modified work-weeks, job-sharing, working offsite and
purchasing additional vacation time.
These various initiatives are achieving results and gaining respect for our organization.
Earlier this year, RBC was chosen as Canada's Most Respected Corporation, Canada's
Best Company for People Management, and Canada's Most Socially Responsible Company
- the latter for a record e eighth time in a row.
As much as we value third-party recognition of our efforts, we also clearly realize
that diversity leadership is not a destination. It's a journey. And it takes a
sustained effort to change mindsets and to get people to think outside the box.
But as one of the most diverse nations on earth, we are already making great strides.
In fact, I believe that we can look forward to a time when embedded biases based
on visible differences will cease to be a factor in our daily lives. Indeed, we
will go beyond that point to ensure that the full potential of every Canadian
is recognized and realized.
Many of our young people are already there. As Canadian demographer David Foot has
remarked, diversity is a non-issue for many of his university students. They regard
debate about diversity as a preoccupation of the baby boomers. I have seen the
same thing with my own three teenagers, who see diversity as a normal fact of
life. So, it is up to us to follow their lead.
Canada is already one of the most diverse nations on earth. As such, we have a tremendous
amount to gain - and virtually nothing to lose - from the efforts we undertake
to create an inclusive society, where differences are respected and valued for
the benefit of all.
From our perspective at RBC, I see diversity both as a great business opportunity,
and as "the right thing to do." I believe that a personal commitment
to diversity from senior business leaders must permeate every aspect of an organization.
And I know that diversity must be embedded in how we conduct business and how
we unleash the full potential of our people.
As we move in that direction, I believe we'll discover that unlocking the power of
diversity will become a competitive advantage for Canada, and a source of national pride