Are bank boards meeting their racial justice pledges?

Three of the four biggest banks that signed a widely publicized commitment to increase the number of Black board members by 2025 have already hit that goal.

In 2020, Bank of Montreal, Bank of Nova Scotia, CIBC and National Bank of Canada signed the BlackNorth pledge, which requires signatories to commit to Black people holding at least 3.5% of board roles by 2025, among other goals.

Boards of the Big Six range from 12 to 14 members, so adding one Black director would satisfy the requirement.

Three years on, three of the four signatories have reached their goal. CIBC has had a Black board member since 2017, National Bank appointed a Black board member in April 2021, and Scotiabank appointed a Black board member in June 2022.

Furthermore, half of the Big Six have committed to racial equity audits in response to engagement from activist shareholders. TD launched an audit in 2022 and committed to reporting progress by June 30 of this year. CIBC and National Bank agreed this year to launch audits in response to proposals submitted by the Shareholder Association for Research and Education (SHARE).

Such audits are important for holding banks accountable to their publicly stated goals as well as for analyzing their products and services’ impacts on communities of colour, said Anthony Schein, SHARE’s director of shareholder advocacy.

“This is a topic where we see all Canadian banks and many other financial institutions as having meaningful material risks,” he said. “Any honest internal assessment will surface some risks, and those are worth addressing — and worth addressing in a way that’s in the interest of shareholders and banks’ clients as well.”

SHARE also filed equity-audit resolutions with RBC and BMO this year.

In advising its shareholders to vote against the resolution, RBC advocated for exploring an audit through the Canadian Bankers Association, stating that “disparities and inconsistencies in … a third-party audit could further exacerbate potential gaps and/or unintentionally create new ones.”

Schein said standards for racial equity audits exist in both the U.S. and Canada.

BMO, citing its existing racial equity goals, advised voting against the resolution because “management does not view a third-party racial equity audit to be additive or necessary at this time.”

The banks’ annual general meetings take place in April. Here’s a look at the board slates each institution proposed:

Bank of Montreal

Racial equity audit status: Recommends shareholders vote against a resolution for an audit at 2023 annual general meeting

Board status, 2023:

• Six of 13 nominees are women (46%; goal of 33%)
• One of 13 nominees identifies as a person of colour (8%; no goal)
  • No nominees identified as Indigenous (no goal) or Black (3.5% goal)

Bank of Nova Scotia

Racial equity audit status: No formal audit reported; no shareholder resolution requesting one in 2023. SHARE said it was focusing on its climate resolution with the bank, but that it hopes to engage with Scotiabank on racial equity in the future. “There’s certainly the opportunity for Scotia to make a similar commitment outside the proxy season,” Schein added.

Board status:

• Four of 12 nominees are women (33%; goal of 30%)
• Two of 12 nominees identify as people of colour (17%; no goal)
  • One nominee is Black (8%; goal 3.5%)
  • No nominees identified as Indigenous (no goal)

CIBC

Racial equity audit status: Will conduct an audit and disclose the results as part of its fiscal 2026 disclosures

Board status:

• Six of 13 nominees are women (46%; goal of 40%)
• Two of 13 nominees identify as people of colour (15%; no goal)
  • One nominee is Black (8%; goal 3.5%)
  • No nominees identified as Indigenous (no goal)
• One of 13 nominees identifies as a member of the LGBTQ+ community (8%; no goal)

National Bank of Canada

Racial equity audit status: Audit work is underway related to the Principles of Responsible Banking, and the bank will collaborate with SHARE on further racial equity audit work

Board status:

• Six of 14 nominees are women (43%; goal of 33%)
• One of 14 nominees is a visible minority (7%; no goal)
  • That nominee is Black (7%; goal 3.5%)
  • No nominees identified as Indigenous (no goal)

Royal Bank of Canada

Racial equity audit status: Recommends shareholders vote against a resolution for an audit at 2023 annual general meeting

Board status:

• Five of 12 nominees are women (42%; goal of 35%)
• Three of 12 nominees identify as Black, Indigenous or people of colour (25%; no goal)
  • One nominee identifies as Indigenous (8%; no goal)
  • No nominee identifies as Black (no goal)

Toronto-Dominion Bank

Racial equity audit status: In progress, with an update to be published by June 30. The bank has retained Covington LLP and Weir Foulds LLP to conduct the audit and expects the audit to be completed during fiscal 2023.

Board status:

• Seven of 14 nominees are women (50%; goal of 40%)
• Six of 14 nominees identify as a visible minority, Indigenous person, 2SLGBTQ+ or a person with a disability (43%; no goal)
  • One nominee is Indigenous (7%; no goal)
  • One nominee is Black (7%; no goal)