On Wednesday, Deloitte Canada issued  “Outcomes over optics: Building inclusive organizations,” a report that implores Canadian business leaders to take a “more courageous” stance to create diverse and inclusive workplaces. The subject is perennially timely; representation of women and visible minorities has increased in past decades in corporate Canada yet remains low while inequities persist. Recently, Hadiya Roderique’s essay, “Black on Bay Street,”  published in the Globe and Mail earlier this month, became a flashpoint: it identified the complex systemic barriers and discrimination that cut short Roderique’s promising legal career. Frank Vettese, managing partner and CEO of Deloitte Canada, responded with  “White on Bay Street,”  an op-ed written from a more familiar perspective; Vettese called Roderique’s essay “a wakeup call” and acknowledged biases in his own decision-making. Maclean’s columnist Anne Kingston spoke with Vettese, also Deloitte’s “chief inclusion officer,” about the new report, and confronting systemic discrimination in corporate Canada.

Q: How long have you been Deloitte’s “chief inclusion officer”? 

A: Almost two years. I’ve been CEO since 2012, prior to that going back to 2006 I co-founded our “women’s initiative.” I have been heavily involved in all things diversity-related at Deloitte. I was executing the CEO role and at same time looking to make deliberate shifts in the organization—from an emphasis on diversity to an emphasis on inclusion. Inclusion really is about creating the conditions for success within the organization within the widest scale. I needed to be the individual setting the tone and the execution plan and linking it to our strategy. Hence, it was an incremental role I took on.

Q: For decades we’ve been hearing white men in powerful positions discuss the value of diversity—and more recently “inclusion.” And yet business remains dominated by white men. The link to Deloitte Canada’s leadership team on your website is broken. But from what I can see, the top three positions are held by white men and only one of six regional managers is a woman. What has Deloitte done, or is it doing, to establish greater diversity/inclusion?

A: In terms of looking at those roles—CEO or chair—you’re correct, they’re men. We’ve got between 20 and 30 per cent of our leadership team as women and 30 and 40 per cent of board as women; I would concur with your point that what we’ve been dealing with, certainly in our organization, and it’s no different than corporate Canada, is a significant underrepresentation of women and visible minorities and other forms of diversity. We’ve recently appointed our CFO, which you could argue is the third most significant position in the organization, as a female. And when you look at broader leadership team, our vice-chairgroup, we have a number of women within that group.

We’ve had a long track record of hiring at the Canadian representation of our population at the entry level—women, visible minorities, all forms of diverse communities. The challenge has been at the most senior levels and one step back, entry into partnership. To me, this has been the real telling tale of whether the firm is getting this right. In the first few years we were struggling with getting representation  in partnership ranks at Canadian population levels. I’m proud of the last two admission years have approximated the Canadian population—last year 45 percent of new partners were women. We’re still not where we need to be.

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Q: Deloitte’s report talks in terms of the need for revolutionary change. Yet as Thomas Kuhn wrote in in The Structure of Scientific Revolutions, paradigm shifts rarely happens from within. You are ensconced in corporate Canada. What makes you confident you can create radical change from within?

A: The thing that gives me great confidence is that there is a clear mandate for this. The whole notion about inclusion for our firm is entirely embedded in the strategy of the firm….Go back less than 10 years, and we’d talk about the most significant issue, the topic of inclusion was something that might have come up episodically. Today it is very rare when I go and exchange at the external marketplace that this isn’t at the forefront at least around awareness and recognition of the business case and the moral imperative. I subscribe that there’s a big difference between that and the “how” and “What do we do to get it done?” As we’ve transformed, we’ve engaged our people, our Millennials, Gen X, they have informed what it is we’re doing. We’ve removed hierarchy…They are the ones telling us this is needed for success. I’m confident this has moved from conversation into real action.

Q: On the point of removing hierarchy, you’ve talked about having no formal offices at Deloitte.  So you don’t have an office?

A: I have no office whatsoever; today I’ve probably operated on six or seven floors.

Q: Yet hierarchy is measured in lots of ways in a corporation, mostly by compensation. What are you doing to flatten that out? 

A: A few things. We used to put more of an emphasis on roles, management jobs that had a value assigned to them. Today the measure is very simple: contribution and impact. It’s determined one person at a time; there’s goal-setting. I think that has dramatically changed the way we share the financial rewards and benefits of the firm. We’re working hard at reviewing our compensation policies and approaches to make sure that we’re removing bias, certainly around gender parity but it goes beyond that to ensuring that what people do, functions they perform, impact they drive is being measured in as an objective way as possible. We’re even looking at introducing things like artificial intelligence into our processes to remove bias.

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Q: In  your Globe and Mail op-ed you admitted you were guilty in the past of hiring people who looked like you. The report refers to “deep underlying cultural sources of exclusion.” Is that one of them?

A: At time I was launching women’s initiative in 2006, I put in place measures to address the concern, “How do we assure having top talent female managers invited into our partnership?” We saw good progress I stood back after a couple of years and looked at the overall numbers and they moved, but didn’t move as much as I thought. When I went to assess the root cause, we were providing support and tailored development to the people we had. But looking to build the business and fill gaps, I was disproportionately hiring people who had similar attributes to me. It was an unconscious bias I did not identify at the time. And once we  identified it, we could put measures in place. So instead of going to the usual suspects and going to the regular places, how do we change practices to widen the aperture to ensure we look at all qualified candidates?

Q: The report refers to the “diversity industry” which began in the 1960s, noting that diversity training in corporations doesn’t improve diversity. Why not?

A: A lot of the training I made reference to was diversity training—it was awareness of differences, it was spotlighting and putting an emphasis on differences. To some extent, a lot of that training was around representation; the measure of success was the numbers, the fact we were looking at measures of diversity as the outcome. And although diversity is important, and I would say that inclusion without diversity is hollow, the flip is true: diversity in itself does not mean the organization is inclusive. If we’re having certain numbers you’re counting doesn’t mean you are creating a workplace where people can bring their whole selves to work; where there is that flexibility, tailoring to how people operate to thrive and succeed on their own basis. A lot of diversity training has failed because it’s still focused on the need to hit certain targets, as opposed to that underlying culture.

Q: The last of the report’s five “action” recommendations is “Own inclusion inside and outside the office”—meaning to call out inequalities and bias when you see them.  You sit on the Dean’s Advisory Council at the Schulich School of Business, which is 56 men and 15 women. And you sit on the advisory board of Catalyst Canada [a non-profit that promotes advancement of women in the workplace];  it’s composed of 11 men and seven women. Last September, CIBC chief executive Victor Dodig, a white man, replaced Bill Downe, a white man, as the board chair at Catalyst. Don’t you have a responsibility to speak out about inequities on corporate boards? Or do you agree that the board of an organization devoted to promotion of women in business should be headed by white guys?

A: First of all, the CEO of Catalyst is a woman. Victor is someone who at the core represents the ideals and what we’re trying to accomplish. I look at it as “Who is in the best position and most qualified at that time to advance what is core to the strategic objectives of the organization?” I do believe it’s important that we don’t get caught up in the notion that in any way starts to approach tokenism—rather that we look at each unique person and how they align against the needs of the role. Having said that, I’m not trying to dispel the underlying point that you’re making which is, “Are there some things we have to deliberately do and deliberately make to ensure our boards represent the broader constituent group and actually execute against the ideals we espouse?” So our Deloitte Canadian board, for example, when we first set up, it was making sure we could sign up for 30 per cent representation by this year. We’re past that number.

RELATED: Visible minorities may comprise one-third of Canadians by 2036

Q: Why a 30 per cent target? Why not 50 per cent?

A: There’s no question that what we hope to achieve in our organization is that we get to the [statistical equivalent of female representation in the] Canadian population in the partner group and in our most senior roles. But in a board situation we don’t simply get, with the stroke of a pen, to construct a board. With our bylaws, we have to have partners who vote. We work through a deliberate process to determine we could achieve 30 per cent. We’re continuing to push boundaries. In our global [Deloitte] board, we had a real deficit in female representation and some of the larger countries had two board seats, one for their sitting chair and one for the CEO. So myself and four other stepped out of our seats years ago and put a top female leaders. Where we have the latitude we’re looking for creative ways to do that. The discourse and effectiveness of our global board has moved up a clear notch.

Q: Could you see any men stepping aside at the corporate management level for women to make that reality happen?

A: We have many organizations, certainly the ones I deal with, who are looking at ways to make step-change movements, not small incremental movements. They’re working very hard to find ways to create conditions so that we can have the best qualified candidates that also happen to be from underrepresented groups at the table. Shortly after we talked about this movement at the global board level within Deloitte, the next couple of major appointments—our U.S. CEO, our Australian CEO—were women. That was a first in both of those markets. I don’t think our example is unique; I think lots of other organizations are well-intentioned; they’re working hard at it and they’re trying to actually effect cultural change so that when it does happen, it’s a substantive move that is well-founded and validated and is not a measure of tokenism.

This interview has been edited for length.

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