Investing in diversity and inclusivity

By Marcos Torres
Published March 1, 2019 | 8 min read

Marcos Torres takes a closer look at diversity, America’s rapidly changing demographics, and human capital as a key competitive advantage in the fast evolving Financial Services and Media & Entertainment industries.

In today’s increasingly global and interconnected financial world, diversity and inclusion are more than just the right thing to do – they are central to the long-term success of all global companies and world economies.

Let me begin by declaring a personal investment in diversity and inclusion. I was not born and bred to be an investment banker, nor was I a traditional target candidate for Investment Banking recruiters 20 years ago. I am one of six children of poor, formally uneducated, non-English speaking immigrant parents who came to this country to provide us opportunities that were not afforded to them.

In addition to my incredibly courageous and risk-taking parents, my tremendous success is in large part linked to a long line of mentors that invested their time and effort to ensure that I had an opportunity to succeed despite my unfortunate background. My truth is that without high quality, structured corporate diversity programs and mentoring initiatives, my Investment Banking journey would not have lasted as long as it has, nor been as successful.

As a Latino-American, my 20-year Investment Banking journey has been both incredibly rewarding as well as incredibly challenging. I was 13 years into my Investment Banking career before I found my authentic self at work. Today, nearly 7 years into this wonderful experiment, I am incredibly privileged to work at RBC, a storied global financial institution with a welcoming corporate culture and an employee base full of talented and diverse-minded people from all walks of life.

At RBC Capital Markets, I have a number of very interesting roles and responsibilities. In addition to my Managing Director transactional responsibilities, I co-chair the firm’s U.S. Diversity Leadership Council, serve as a member of the U.S. Investment Banking Executive Management Committee, am incredibly involved in the firm’s recruiting efforts, and I mentor a lot of young people. As one of only a few Latinos in senior leadership positions across the Investment Banking industry, I have unique first-hand perspectives on diversity and inclusion.

Rising diversity

So, what has changed in 20 years? Well, a lot has changed and a lot hasn’t changed. In the last 20 years, our country has experienced a demographic tsunami, as minority populations have grown disproportionately. Today, Latinos, Blacks and Asians collectively make up nearly 40% of the total U.S. population. Moreover, it is projected that by 2045 the U.S. will become a majority-minority nation.

There’s no doubt that our population’s growth and diversity has and will continue to serve as a key pillar of our country’s economic power and future growth. Despite seismic changes in our country’s demographics, there is still a lot that has not changed. For example, many of our workplaces lack diversity and do not foster inclusion, especially in the C-suite and senior management ranks. The truth is that the majority of C-suites across America remain overwhelmingly occupied by older white men. This is especially true in Financial Services and Media & Entertainment, two industries where I spend a meaningful amount of my time.

Financial Services and Media & Entertainment are two of the most consumer-facing industries on the planet. Latinos, Blacks and Asians consume financial services and media products, especially mortgages and content, at incredibly high rates and that consumption rate is only growing. Yet, for some reason, these industries have not succeeded in achieving a workforce that, across all levels, is representative of their respective consumer bases. This makes no business sense. Think about it for a second. In order to remain competitive and capture market share, companies must capture customers; in order to capture customers, companies must have employees that understand the nuances of their target customer base.

Solving the D&I equation

Let’s use an example to further illustrate the point: as a corporate executive, would you send a non-Japanese person into a high-profile meeting to close a transaction with a Japanese client that only speaks Japanese? Of course you wouldn’t! You would include a Japanese person (or someone incredibly familiar with Japanese language and culture) as part of your team in order to maximize your chances of winning the high-profile mandate. The reality is that companies with the most diverse and talented workforces will be better positioned to capture the most diverse customer bases. This makes sense – it’s simple math. So why have these major industries failed at solving simple math equations?

The moral arguments underpinning the case for diversity and inclusion are incredibly overwhelming. The thinking is pretty straight-forward and goes as follows: by interacting with people from the varied races, genders and socio-economic backgrounds, one’s personal and professional perspectives are enriched. That enrichment allows us to make more thoughtful choices across all aspects of our personal and professional lives. This is common sense and virtually impossible to refute.

Many firms often argue that they want a more diverse workforce, however despite their “tremendous” efforts to recruit a diverse workforce, they cannot find diverse talent in the marketplace. In other words, these firms are suggesting that, in this country, people with certain skills (or the ability to develop certain skills) simply do not exist proportionately across all demographic groups.

Really? Can this be true? We, the first country to land a person on the moon. We, the greatest economic power on the planet. We, the leader of the free world. We, the country built by immigrants. We cannot find a way to make our workforce more representative of our beautifully diverse population?

The great Albert Einstein once said that “doing the same thing over and over again, but expecting different results, is insanity.” Are we really insane? The truth about life is that solving a complex equation often involves stepping away and looking at it from a different perspective. Sometimes the answer is meaningfully simpler than one thinks. Sometimes overthinking the equation is itself the problem. Perhaps we have been overthinking this. Maybe we need to get out of our own heads and look at diversity and inclusion from a different angle. The fact is that life’s most important lessons are learned from the experiences of others. Let’s examine how others have successfully solved their diversity equations.

Through a different lens

Let’s look at the issue of diversity and inclusion from different angle, from the perspective of the National Football League (NFL). The NFL is the most successful major league sports business in the world. Like all major league sports, the NFL is the ultimate merit-based business. An athlete’s success is measured, on a daily basis, by the outcome of his or her performance; an athlete’s race, gender, or socio-economic background are irrelevant. Only performance and team chemistry matters. However, prior to 2003, the NFL’s head coaches, among the highest-paid executives in the world, were not as diverse as the athletes on the field and the NFL’s customer base.

Sometimes unconventional thinking is required to achieve unconventional results. In 2003, the NFL instituted The Rooney Rule, named after the famed Pittsburgh Steelers owner Mr. Dan Rooney. The Rooney Rule is a league policy that requires all NFL teams to interview ethnic-minority candidates for head coaching and senior football operations jobs. This new rule became league policy after a few prominent civil rights lawyers demonstrated that black NFL head coaches were more likely to be fired and less likely to be hired (as compared to their white counterparts) despite overwhelming data showing that black NFL head coaches won a higher percentage of games (compared to their white counterparts).

The Rooney Rule does not mandate that teams hire ethnic-minorities. It simply requires all teams to interview qualified ethnic-minorities as part of the hiring process. It’s based on the basic idea that every team should interview every qualified candidate available, irrespective of their ethnicity, prior to making a final decision on any important new hire.

In 2003, The Rooney Rule was actually groundbreaking thinking. As a result of The Rooney Rule, by 2006, the percentage of black head coaches jumped to 22% from only 6% prior to the Rooney Rule. The policy was so successful that it has been adopted by other major sports leagues and scholars are now advocating its implementation in collegiate sports.

At RBC, we’ve learned a lot from our employees, our customers, and even the NFL. At our firm, diversity and inclusion is a business imperative. It’s part of our corporate DNA. As they say, the tone is always best set at the top. Kathleen Taylor, the Chair of RBC’s Board of Directors (yes, a female Board Chair of a global financial institution!), has been a strong proponent for increasing diversity on boards and in business to help companies improve their competitiveness. David McKay, our CEO, says “companies thrive when they are open to new ideas and new people. As do economies and our world. That is why the world’s most innovative businesses, cities and economies are the most diverse.”

My business partner and I run a highly successful and fast-growing business (the Communications, Media & Entertainment group) within RBC Capital Markets. Maintaining a solid corporate culture and monitoring key performance metrics are the cornerstones of our success. Our group produces best-in-class revenue per banker and excellent year on year growth, while maintaining low people turnover and a strong recruiting track record. Our ability to continue delivering year on year growth is heavily dependent on hiring diverse talent and fostering an inclusive environment where diverse perspectives and ideas are freely and frequently shared. Our group’s effective partnership with RBC’s human capital management personnel is invaluable.

RBC has a number of important programs and initiatives focused on diversity and inclusion that span three principle categories: proprietary programs, external events and programs, and external partnerships. The RBC proprietary undergraduate programs includes RBC Women’s Advisory, LGBT+ Sophomore Insights, and RBC Pathways Diversity Scholarship. RBC’s proprietary MBA program is the GIB Women’s MBA Immersion, a program focused on female MBA students.

Mentoring is critical to all RBC’s talent development initiatives and is part of everything we do. Additionally, RBC hosts a number of diversity and inclusion networking events, including Veterans Symposium, RBC Capital Markets D&I Discovery Day, CREAR Futuros Latino Leaders Day.

Lastly, RBC strategically partners with high quality external organizations to assist in achieving our broader diversity goals. These organizations include Hispanic Federation, SEO, Toigo, Posse, TEAK, Hispanic Scholarship Fund, O4U, and Ramba.

Interestingly, many major financial institutions, including Goldman Sachs, Citibank, Morgan Stanley, and JPMorgan, are increasingly establishing programs focused on diversity and inclusion. Among these institutions, JPMorgan (my alma mater) has recently made significant strides. Jamie Dimon, JPMorgan’s Chairman and CEO, established a number of programs and policies aimed at attracting, hiring, retaining and advancing black talent. Moreover, Dimon has tied business leader compensation to results around diversity and inclusion. In doing so, he said “our success depends on the quality of the people we attract and develop. We must maintain an environment that is fair and respectful, where people from different backgrounds feel accepted and valued.”

All things are increasingly global and interconnected; the world is changing at lightning speed; industries are consolidating rapidly and some industries are actually disappearing; changing channels and thinking unconventionally is now conventional.

Marcos Torres

Marcos Torres
Managing Director, Investment Banking, U.S.

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