How to fix corporate Canada’s trickle-down approach to diversity

To ensure an inclusive corporate culture, deeper work must be done

Illustrations by Franziska Barczyk

Conversations about the need for a more diverse and inclusive corporate Canada are not new. But recent anti-racism protests have placed the corporate realm under increased scrutiny. Companies face mounting pressure to address systemic racism by diversifying their boards, but does doing so ensure that representation filters down to the executive level, and ultimately create an inclusive corporate culture?

A significant body of research has made clear the correlation between a diverse senior management team and improved company performance. McKinsey’s latest diversity study, released this spring, found that companies in the top quartile for ethnic diversity were 36% more profitable than those in the bottom quartile. A 2018 Deloitte report found that inclusive companies also outperform on customer satisfaction (+39%), productivity (+22%) and turnover (-22%). Regardless of the evidence, however, moving the dial on corporate diversity, equity and inclusion is complicated and slow going.

Corporate Knights analysis of 68 Toronto Stock Exchange companies with at least $1 billion in annual revenue found that just eight had at least 10% racial diversity on both their boards and senior executive teams, including Canadian Solar Inc., BlackBerry Limited and Toronto-Dominion Bank (see table below for the top 10). More than a third (37%) of large publicly traded companies in Canada did not have a single racially diverse board member or senior executive. It’s a startling figure, considering that 27% of Canada’s population is racially diverse, with 5% of that being Indigenous.

A number of companies are scrambling to address racial inequities by hiring a chief diversity officer (CDO) or diversity and inclusion (D&I) manager. But between the politics, bureaucracy, fiefdoms and silos, one CDO or D&I manager – with little to no budget, limited staff and a reporting line that is levels down from the CEO – is hardly going to be heard, let alone redesign a system to change ingrained beliefs and power structures.

The ways in which systemic racism and bias are deeply rooted within corporations are not always easily identified or understood. In addition to Black, Indigenous and people of colour (BIPOC) being passed over for promotions more often and hired at levels far lower than their qualifications, in recent months racialized Canadians have publicly shared their experiences of microaggression in the workplace. I myself have had a C-suite executive assume that I had completed my doctorate degree at an Indian university, even though I’m Canadian. I was also told, by the same female executive, that there are not enough qualified women of colour. Meanwhile, there are more racialized professional women in Toronto than non-racialized professional women, yet non-racialized women still outnumber racialized women in corporate leadership roles 12 to 1, according to Ryerson University’s 2020 Diversity Institute study, Diversity Leads.

These types of comments may seem harmless; however, research indicates they have a powerful impact. Between 2016 and 2018, Catalyst, in association with Ascend Canada, surveyed men and women who identify as Black, East Asian or South Asian. The study found that people of colour carry an extra emotional burden at work that’s detrimental to their health and often causes them to contemplate quitting.

How can companies do better?

Making charitable contributions to organizations committed to serving diverse groups, supporting events that celebrate our vibrant and diverse communities, making pledges to increase board diversity, and announcing targets to increase the number of racialized employees by a specific percentage by a certain date – these are important and good starting points. However, we cannot brush off the hard, roll-up-your-sleeves, long-term work of creating a diverse workplace where all employees can bring their full selves to work, be engaged and productive, and feel that they are valued, supported and belong.

Map the right metrics

What types of data, metrics, actions and organizational structures enable us to create equitable and inclusive workplaces? First, collect data on gender, race, ethnicity, age and disability at each job level and analyze for hiring, promotions, terminations and departures. Pay data is already being collected; use this data to analyze salary gaps within and between jobs by gender, race, ethnicity, age and disability. In addition, consider conducting surveys that capture employees’ experiences and views on compensation, promotions, assignments, mentoring and performance reviews. Questions such as “Do you feel that people see you as a member of a racial group rather than a team member?” or “Do you feel that you have to prove yourself repeatedly to get the same recognition as your colleagues?” can provide answers about where bias occurs most often and what systems need to be improved.

Distribute skill-building

Every workplace has high-profile assignments that are career-enhancing and low-profile assignments that benefit an organization but not the individual’s career. Research indicates that racialized professionals are more often assigned low-profile work. Distributing high-profile and low-profile work equitably lets you tap into the full potential of your team and support individuals’ professional development goals as well as the team’s goals. Ask a junior colleague to chair team meetings and manage the agenda to create space for more dialogue and different perspectives. Diversity at the top can occur only when diverse employees at all levels of the organization have access to assignments that let them take risks and develop new skills.

Create belonging

To identify systemic issues in the workplace, we have to take steps to understand racialized people’s experiences in those spaces and use that knowledge to make changes that foster belonging. Pay attention to how biases show up in meetings and work proactively to address them. Keep track of the composition of the meetings – who speaks, who doesn’t. Has everyone had the opportunity to contribute? Sometimes before meetings I ask colleagues who are quieter if I can call on them. I want to ensure they have space to contribute without making them feel uncomfortable. Every time I’ve done this, the person has welcomed the opportunity to contribute and appreciated the space created for them.
Also, keep track of who gets credit for ideas versus who originated them and ensure that everyone with a part to play is at meetings. We can all recall a time when our ideas and work were credited to someone else, but racialized people experience this more frequently, racialized women in particular.

Go beyond HR

Beyond data and metrics, we need to acknowledge that the world is changing quickly and question whether traditional organizational structures enable the corporation to address emerging business priorities. In many conversations with racialized peers throughout my career, I have heard frustrations about not feeling heard by HR, feeling that HR was “on the side of the corporation, not employees.” Human resources departments are set up to manage risk, an important and necessary function; however, they may not be the right department to advance the diversity, inclusion and belonging agenda. It’s unrealistic to expect employees to see HR, the department that terminates employees, as also the department responsible for creating an equitable, engaging and inclusive workplace. If new ways of conducting business are to emerge, so too must new organizational reporting lines.

Chief diversity officers

Roughly half of S&P 500 companies now have chief diversity officers, according to The Wall Street Journal, which found that while demand for CDOs is high, so is turnover, with many CDOs leaving because of “a lack of resources, unrealistic expectations and inadequate support from senior executives.” Either the CDO must be empowered by the organization to make the systemic change it’s seeking or, as in the case of Neilsen’s David Kenny, the CEO should consider also taking on the CDO role.

Regardless, as corporations come face to face with disruption, leaders need to really listen to their teams, be willing to make the necessary changes, conduct themselves with compassion and put their people first. Diverse voices must actually be heard. This requires listening without preconceived notions, which sounds easy, but it requires empathy and a culture that truly values open communication.

We are at a moment in time when corporations are faced with an overwhelming demand for change. We have an opportunity to ensure that diversity flourishes throughout companies and to create a culture of belonging. As Maya Angelou said, “I’ve learned that people will forget what you said [and] what you did, but people will never forget how you made them feel.” In the corporations of the future, racialized employees must feel that they are included and that they belong.

Shilpa Tiwari is the founder of Her Climb, a social enterprise with the mission to increase the number of racialized women in senior positions in corporations.

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