Racial justice, one year later

This article appears in the June 2021 issue of Advisor’s Edge magazine. Subscribe to the print edition, read the digital edition or read the articles online.

The past year has not been business as usual.

I’m writing this less than a week after Daunte Wright was killed by police in a Minneapolis suburb, mere miles from where George Floyd was murdered in 2020. And barely a month has gone by since a shooter killed six Asian women in Atlanta amid surging anti-Asian attacks in both Canada and the U.S.

To some, these events represent lowlights in an unrelentingly horrible news cycle. But to others — clients, colleagues, community members — these events prompt visceral, personal reactions of anger, sadness and trauma.

That could have been my elderly parents. That has been my brother. That could have been me.

“We are at a point right now where everything around us is so broken,” said Dahabo Ahmed-Omer, executive director of the BlackNorth Initiative, which was created in 2020 by the Canadian Council of Business Leaders Against Anti-Black Systemic Racism. “Resilience is an expectation that’s way too high on communities that are suffering.”

Ahmed-Omer applauds how strong marginalized communities have been through centuries of discrimination, but said that now, “we need to rely on those around us to carry the load, and do it in such a way that understands where the trauma comes from.”

The financial services industry certainly has the capacity to carry the load.

The Investment Industry Association of Canada reported that the investment industry raked in record-high revenue and profits in 2020: operating revenue rose 9.4% year-over-year to $25.9 billion, while operating profits surged nearly 20% to cross $9 billion.

And as this year’s proxy circulars and annual reports will remind you, banks, insurers and asset managers made commitments of varying concreteness, detail and feasibility last summer to combat systemic racism.

The time for statements has passed. A year out, stakeholders are looking for specific actions.

Darryl Brown, founder and investment planner with You&Yours Financial, said he’s seen some movement. “There’s more willingness to admit there are structural and systemic barriers in place,” he said.

But he questions whether firms truly want to change the system they profit from. He hasn’t seen widespread acknowledgment of the harm caused by the financial industry’s historic practices, such as redlining, and the biases that persist today. (For example, a report released in April found that 78.5% of Black female entrepreneurs had trouble accessing financing.)

“The way firms think about systemic racism is flawed, because there’s so much focus on metrics and numbers around employee representation,” said Brown. While he acknowledged that measurement helps define the scope of a problem, he said numbers can also mask the reality as felt by employees.

For example, firms nearly always report representation figures on an aggregate basis — both from a race and position perspective — without accounting for seniority or salary levels. (That’s if they report the figures at all.)

Instead, Brown said, “I would like to see a broad and in-depth commitment to focusing on acknowledging and tackling systemic issues.”

Ahmed-Omer hopes her team can influence firms to do just that.

The BlackNorth Initiative was spearheaded by Wes Hall, executive chair and founder of Kingsdale Advisors. The initiative asks CEOs to pledge that Black people will hold at least 3.5% of executive and board roles based in Canada by 2025 and to remove barriers to advancement for employees who are Black, Indigenous and from other marginalized groups.

The initiative’s ultimate goal, however, is to reshape corporate structures that uphold anti-Black systemic racism.

At press time, more than 450 organizations had signed the BlackNorth pledge. Notably, that figure includes only four of the Big Six banks: Bank of Montreal, Bank of Nova Scotia, CIBC and National Bank of Canada.

Ahmed-Omer said she’s encouraged by signatories that want to go beyond the pledge and ask her when “Pledge 2.0” will be released.

These companies are “saying to themselves, ‘We’re late,’” she said. “But they’re catching up in a way that allows us to see they mean business,” such as through grant and loan programs specifically targeted at empowering Black customers.

Despite these strides, Ahmed-Omer and Brown said there’s plenty of work left to do. Ahmed-Omer admits dismantling systemic racism is a daunting challenge, but said it’s possible if many people decide individually and collectively to act.

“True recognition of your privilege is going to force you to turn your privilege into a sense of duty,” she said.

Melissa Shin is editorial director at Advisor’s Edge. Reach her at mshin@newcom.ca or on Twitter.

Melissa Shin

Melissa is the editorial director of Advisor.ca and leads Newcom Media Inc.’s group of financial publications. She has been with the team since 2011 and been recognized by PMAC and CFA Society Toronto for her reporting. Reach her at mshin@newcom.ca. You may also call or text 416-847-8038 to provide a confidential tip.