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CEO Viewpoints

Episode 2: Trust, transparency and making an impact through ESG

“I truly believe ESG is everyone’s responsibility.… I may be the champion, but it’s everyone’s responsibility. We put it in people’s scorecards so I can hold my leaders accountable. And when we put it in the scorecards, it was directly attributed to how they can contribute to that journey.”

Rania Llewellyn, President and CEO, Laurentian Bank of Canada

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How can leaders accelerate progress on one of today’s top business imperatives?

At a time of renewed uncertainty and rising expectations around performance on environmental, social and governance (ESG) matters, leaders need to take bold actions to position their organizations for long-term growth. But what does this mean for Canadian organizations determining their own approach to the ESG imperative?

In the second episode of the CEO Viewpoints podcast series, host Shelley Gilberg sits down with Rania Llewellyn, President and Chief Executive Officer of the Laurentian Bank of Canada, to discuss her organization’s ESG journey. Rania and Shelley explore the importance of anchoring ESG strategy in an organization’s purpose and values as well as the critical role of trust and transparency in navigating an increasingly complex business landscape. Rania also discusses her own career journey, including how she became the first woman to head a major Canadian chartered bank.

Be sure to stream, share and subscribe to our podcast series today. If you enjoyed today’s episode, let us know by leaving a review on Apple Podcasts.

Shelley: Welcome to our PwC Canada CEO Viewpoint Podcast Series. This is a series where we discuss key themes from our 25th Annual CEO Canadians Survey with leading Canadian CEOs. And our last episode, we talked about how environment, social and governance known as ESG has risen to the top of the CEO agenda. Today, we're going to continue that discussion with a new guest. My name is Shelley Gilberg, and I'll be your host for this episode. I'm a partner here at PwC Canada, and I lead our ESG markets. Thank you so much for joining us today. We have a guest with us that I'm personally really excited to spend some time with. Rania Llewellyn, the president and CEO of Laurentian Bank. And she's going to spend some time with us on her journey, ESG strategy and transformation, and her thoughts on where trust and leadership play in all of this. So welcome, Rania. Delighted to have you with us. You have such a unique and interesting journey on more than one front, and I have a few questions for you about that. Maybe we'll start with I think our listeners would love to hear more about how you became the first woman to head a major Canadian chartered bank in 2020. And I was so excited to see your appointments. I would love to, as our listeners would, I think, to hear more about that journey.

Rania: Thank you, Shelley, for having me today on your podcast. So yeah, so in terms of how did I get here, well, it's been quite the journey, but some of the key, the personal story to start off with. So I was born in Kuwait to an Egyptian father and a Jordanian mother, lived there for 11 years, then moved. We were fortunate enough to leave actually Kuwait before the Gulf War and moved to Cairo, Egypt. And I finished my high school there. I actually finished high school at the age of 14, wanted to always be a doctor. And at the time the only private university was the American University in Cairo, and I had studied in English. And so my dad said, you know, you really probably should attend that school. And they didn't have medical school. So when I got in, I said, what's the two hardest professions? And at the time it was IT and I didn't know anything about technology and business, so I decided to do business. So finished my first two years there. And then to be honest, as a family, when the unrest started happening again in the Middle East, we decided we wanted to immigrate. We actually landed August 22nd, 1998 to 30 years ago in Halifax, Nova Scotia, of all places. I ended up going to Saint Mary's University, finished my undergrad there, did a Bachelor of Commerce in marketing and finance and so excited to graduate and typical immigrant story couldn't get a job. My name was not Llewellyn at the time. As you can see or hear, I don't really have an accent. It was just getting that first step at the door. It's hard when you just are applying on paper. And so I ended up being I ended up working for Tim Hortons with my bachelor degree and decided to go back and do my MBA, because that was what typical immigrants do is go back and just get another degree. I was fortunate enough whereby my dad had a business and his commercial account manager from Scotiabank at the time, met me and said, well, why don't you come work for us? And I said, I keep applying. You never call me back. And I first and I got ended up getting my first teller job there. I said, I'm going back to do my MBA. And so that was my foray into banking. But again, I was ready to graduate from my MBA and again couldn't find a job, including working for Scotiabank. But at my swearing in ceremony with my family as a new Canadian, there was a special guest among us that day and it was the senior vice president of the Atlantic region. And my mother asked me to go up and ask him for a job. And I was like, Mom, this isn't really the place for me to ask for a job. And she said, just do it. She's barely five two, but she's a tough woman. So anyway, so I went up to him and I said, Mr. Keith, I work for you. You don't know who I am. I introduced myself and he and I said and I invited him to our reception at St. Mary's University, was a wine and cheese reception. I had no idea he actually sat on the board. So fast forward, I met him at the wine and cheese reception and went up to him and I said, Mr. Keith, I was born in Kuwait, I'm half Egyptian, half Jordanian, lived in Egypt, came to Canada, Scotiabank's Canada's most international bank. This is the only bank I want to work for. He said, do you speak Spanish? And I said, I'll speak whatever language you want me to speak as long as you pay for it. Anyway, I ended up calling him ten days later and his assistant, Zara. When she took my name down, she said, you're the new Canadian. And I said, I made an impression. And it was because of that ten minute meeting I had was with Mr. Keith, I ended up stop being a teller on a Saturday, and I got my first breakthrough as a commercial account manager in training on Monday. And so the moral of the story is, and I tell my kids, you don't ask, you don't get. What's the worst thing that can happen? So that was my foray into banking. So then I moved from commercial banking. I took another step, I ended up moving to Toronto because I thought, you know what, there's nothing like head offices in Toronto. I didn't really have a job. I accepted a motley position. And then I joined corporate banking. I was a corporate banking for seven years. And so I always took routes that were not really well, well laid out. I put my hand up for a special project and I ended up creating my own job being VP of Multicultural Banking. It was really a seven month secondment. I was one of four people, had no idea I was creating my job. And that was to start up a new business targeting newcomers to Canada, which was near and dear to my heart. So I did that for three or four years and then again, you know, put my hand up and said I was ready for a move. I became president, CEO of a subsidiary of the bank that nobody really knew anything about called Roynat Capital. So I spent 26 years of my career there, Shelley, where I find that I was almost training for this job. I did very different roles. The last job I did was payments, which was technology, product operations. So I didn't grow up in a vertical. And being an immigrant, being female, being young made me different. And so when this opportunity came up, I just couldn't say no. It was a transformational opportunity. It was sitting at the top. Yeah, I feel like I've been training for this role, but it was that personal journey that I usually share because I think at the heart of it is taking chances, being courageous and not agreeing to fit in. But I always tell people why fit and when you can stand out.

Shelley: I love that story in terms of not only how incredible your journey is, but the sometimes you need to track your own path and there isn't necessarily a standard way to get to where you want to be. Sometimes I even know what you want to be. And maybe that theme we can tug on a little bit, because one of the other things that I'm curious about, and I suspect our listeners are, is that theme of trailblazing and sort of needing to create your own path comes through in so many ways in your story. And you were one of the first CEOs who personally took responsibility for ESG at the bank. And I happen to know you're very passionate about this. Can you maybe share a little bit more about why did you think that was so critical? It wasn't common at the time. And what kind of values drive you in the bank?

Rania: I think it's because of where I came from. The fact is immigrant female, you're kind of the underdog. How do you create that equitable environment? So it was really core to who I was. And I kind of always, whether I was at Scotia, where I was head of the Black Employee Network, I actually led ED&I for capital markets there as well. So here was an opportunity where I can build the bank that I've always wanted to work for. We hire a lot of newcomers to Canada. We have a lot of diversity at Laurentian Bank. And when you look at the history of the bank, 176 years ago, it was the bank that served the underserved. So it was just a natural fit. So we started with our Courageous Conversation series. We started with a number of employee resource groups. And then from there that was really the beginning of our ESG journey. Then you kind of move into, okay, let's do a data analysis, let's look at the E and look at the G. But it was true to who I am as a person. And I believe in being authentic. Authentic as an organization in terms of our purpose statement. Authentic as an individual leader. And so it was really, really important to me to kind of look at it from that perspective, but make sure it's not a standalone project. It's actually embedded in everything that we do. It's how we do business. It's how we conduct ourselves. It's how we recruit. It's how we interact with our vendors, how we do business, how we design our products, how we deliver our product. So that was really, really important to me as well.

Shelley: Maybe if we if we take out a little bit further, how did you decide what to prioritize after you got sort of that S sorted? And where's the bank at now?

Rania: Yeah. So in terms of part, I mean, there's lots and lots of ways. It's like it's like reviewing a strategy. And that was really the fortunate thing is when I came in, I came in as a new CEO. I brought in a whole new leadership team. We were reviewing all of our operations at the same time. We had to kind of come up with our purpose statement. And our purpose statement is all about we believe we can change banking for the better by seeing beyond numbers. As we were building our strategy, one of the key strategic pillars is making the better choice. One of our core values is all about acting courageously, making sure we're creating an environment where everyone belongs. So the ESG is embedded in everything that we do. So I always say, you gotta you can't climb the mountain all at once. You need to kind of take steps and but have that north star of where you want to be. And I think that was that was really important. So it really started with the purpose statement to galvanize and bring our employees together. So the S was we felt we did well on this. And so the next thing we did was we started looking at the E. We hired a new head of ESG. We started building a TCFD roadmap. We started kind of saying, okay, well, where we at? So you have to kind of look at your current state. We started engaging stakeholders internally our employees, our board, our shareholders, our vendors. And so then you start kind of building that roadmap. But being again very focused on where we want to play, where we want to go. We launched our very first ESG report, and in that we disclosed our Scope 1 into GHG emissions. We signed on to PCAF. And then we started engaging all of our employees in the conversation as well as to what's important to them. Our employees are just like any other stakeholder. So we can start building that heatmap and just look at the complexity, what's required from a regulatory perspective. We had a lot of things that we had built at Laurentian Bank, but we hadn't disclosed it. From a metrics perspective and a shareholder perspective, disclosure is absolutely critical to being transparent, whether it be on the E or in the S. And from a governance perspective, we started building ESG policies within our board, our Exco teams. We started putting metrics so that it starts with really knowing, okay, what's your current state? Where do you want to go? And yeah, there's lots of different directions you can go, but you have to be really clear on it's a multi-year program. It's not ones and done. And so being very, very thoughtful and strategic and we're a smaller organization, so we have limited resources. So how can we make a bigger impact? And you have to be able to measure that impact and making an impact to the environment, making an impact on employees lives, making an impact to our shareholders. And so I always tell people start small, but you have to start with your current state, build a roadmap that kind of resonates with what you're trying to accomplish and not what everybody else is trying to accomplish. Right. And then make sure that you're actually reporting and delivering and you're measuring accordingly.

Shelley: You've said a couple of things. So, one, you talked about purpose sort of at the beginning. You've talked about the importance of that transparency. How do values and how do trust sort of play into how you're knitting all this together?

Rania: I always tell people trust is earned over time and it's earned through actions delivering on what your commitments are and it can be broken in one interaction. Even joining an institution where I was a new CEO. Nobody knew me, I didn't know anybody in the middle of a transformation, in the middle of a pandemic. Building trust with employees was absolutely critical. And it starts by two way communication and transparent communication. And then whatever you say, you should deliver it. Despite the transformation, we had a third of our workforce turnover, new strategy, new vision. But what we did was we went out with an employee survey almost a year into that transformation to see what the employee engagement scores look like. And to be honest, I was pleasantly surprised. Trust in management was at an exceptional high of 89 percent. And so when you see that, it really resonates in terms of the level of communication, the level of transparency, the level of engagement that we're getting from our employees is resonating. And that's the way we've, to be honest, use that same methodology for our stakeholders, whether it's our shareholders, whether it's our analyst community. So every quarter we report to the analyst and shareholder community, and we've outlined our KPIs very, very clearly. We didn't have to do that. So that's over and above our financial targets. So for example, in our KPIs, we actually talk about our employee engagement number that we're targeting for the next year and three years out. We talk about the KPI for turnover and so it's really, really important to engage. But I always tell people, don't ask people what they think. If you're not going to act on it. That's where trust is broken. And so we did the same thing on the ESG front is we've actually started by educating. So we have a new leader for ESG and we actually put a one on one kind of ESG deck together. We started tying it back to this is our strategy, these are our pillars, these are our values. I truly believe ESG is everyone's responsibility. It's not just my responsibility. I may be the champion, but it's everyone's responsibility. We put it in people's scorecards so I can hold my leaders accountable. And when we put it in the scorecards, it was directly attributed to how they can contribute to that journey. So it's not just a generic metric. It's for our commercial staff. How are you going to personally come up with new products or new services or help your clients on their ESG journey? So I think that's how you build trust. It has to be transparent. And you know what, even in our KPIs that we're starting to show in our last quarterly results, it's showing a little bit of yellow. And so when people ask me, but it's yellow, I'm like, well, that's part of the transparency aspect of it. We did that in our ESG report in terms of our disclosure. So we know where we're at in the process. We know where we need to go. And we know where our gaps are. And I think that's really important in terms of building trust with all of your stakeholders.

Shelley: One of the interesting stats that we saw in the CEO survey was that 60 percent of the Canadian CEOs are concerned and place attracting, retaining talent is a very high priority. Data point to was there anywhere up to 34 percent of the workforce regardless of age demographic is considering a change of employer based on shared corporate values. What are your observations from your experience at Laurentian in terms of does this make a difference in attracting and retaining top talent and engaging people?

Rania: I think the pandemic has really made people take a step back and value and kind of reevaluate kind of their work life. And I hate to use the word balance. But just in terms of their purpose, how are my values aligned with my organization's values? And that resulted in a lot of turnover as well as people kind of reconsidering who their employer is. And so it actually from a timing perspective, it worked out perfectly for us because we just launched our new purpose statement, our new core values. And so I would say, despite the heated competition, we've been able to attract a lot of talent in the last year. And I think it's because I know it's because I hear it from our employees. We just had a couple of employee appreciation events and they say that purpose statement really resonates with them. Right. And the fact is, to be honest, that first female CEO of an organization that resonates with a lot of women, a lot of underdogs, a lot of immigrants. And so having your core values embedded in everything that you do and making sure that the employees feel that is absolutely critical to why they stay. But the other thing that we've done, Shelley, is, as you know, the pandemic is I wouldn't say it's like in our rearview mirror yet, but things are opening up again. And so we were one of the few organizations that throughout the pandemic did not mandate vaccines. We actually encourage people to get vaccinated, and we lead by example. We encourage them by showing them the reasons why, but ultimately it is a personal choice. And we needed to make sure our employees and our customers are safe, particularly those who are going into the branches every day. Not once during the pandemic did we mandate our employees to come back. And so based on our new strategy and our future of work strategy, we sent out a survey to our employees and they told us we don't want to come back full time. And so we listened. Based on that, we actually got rid of 50 percent of our real estate, our corporate head office real estate, which is great for our employees, but also great from an environmental perspective. So we got rid of that real estate footprint, which also means that our employees are not going to be commuting to work every day, which means that from a gas emission perspective, we're contributing to the E. And from an S perspective, our staff, they have work life balance. They have more time to spend with their young ones, their elderly, their family, spend more personal time on their own. It actually has helped in terms of our recruitment because it differentiates ourselves, but it's true to our core values. And while we're trying to reimagine what the future of our real estate footprint looks like, we've actually engaged in focus groups with a third of our employees. And so they're helping us co-create an ideate where does that future of work look like for us at Laurentian Bank. And so, so again, the same principles of two way communication, listened, learned. But we made it again very transparent and clear. We're not going to be able to make everybody happy. So we've come up with 13 personas. We have a cultural boot camp that we're going to give to leaders to work with their teams to show them how difficult it is to actually there is no one size fits all.

Shelley: If you had to summarize your best advice for people that are just starting out on this journey, particularly around ESG and values disclosure, what would you tell them?

Rania: Yeah. What I would tell them is like any other risk and it's interesting even, you know, even people who people have never actually worked in risk see risk as a deterrent to doing business. And I always say if you turn it upside that risk is actually creates an opportunity. And so how do you leverage ESG to create opportunities for your organization and for all of its stakeholders? And so if you make anything a checkbox exercise, that's the problem. So even when new regulation comes into play, I always tell people from a risk perspective, if it's there to serve our customers, how can we use this regulation to differentiate ourselves to provide trusted advice and counsel? That's the way I look at ESG. So I'll give you a I'll give you an example. We announced in December that we have signed a partnership with a new fintech to help us transform our visa platform. And so in selecting the fintech, it was fantastic. The CEO is an immigrant, the CEO is female. So it's like awesome. We're supporting a female individual. As part of the design of the platform, we told her that we need some rewards programs that would resonate with our ESG subsegment of our customers. So who on your platform can kind of help service that? Right. So there's lots of things that you can embed even with our partners, our vendors, whether it be PwC. When I interact with them and to be honest, I see a lot of male partners covering us as a we need to challenge them on where are your female partners? We're doing that with our legal counsel. We're doing that across the board. So it's taking it and baby steps. Because I think if you try to just say ESG and here's what it looks like, it becomes very daunting for somebody who doesn't know where to begin. And that's why how do you bring it down to that commercial lender who you tell them, I'm not asking you to exit this business, but I'm asking you, how can we come up with programs that can help your client who probably has the same pressure as you on their ESG journey? How can we do that HR? How can we do that in operations? I always tell people it's little examples that can help people, then understand, oh, now I know how I can contribute to that ESG strategy. So it's no longer a tick box exercise. That's how I approach everything is. If you've never kind of walked in someone else's shoes, it's really hard. How do I make it resonate with you by bringing it down to how you do business every day and come up with a specific case study that will help you kind of contribute to the overall goal.

Shelley: I think it's excellent advice, Rania. I think it resonates across regardless of sector big or small, how do you how do you sort of take your first steps on this and appreciate that. Maybe the last question for us to get some perspective from you on today is if I think about everything even the team at Laurentian have accomplished in the last two years, what are you most proud of?

Rania: The thing I am most proud of is the leadership team that I have been able to build is extremely diverse, different backgrounds, different ways of thinking. I think it really speaks from an ED&I perspective and how this team has come together and what we've been able to accomplish in a very short period of time. On the ESG front, I would say the fact that it's not a program, it's not a side project, it's really fully integrated across the bank through our core values, our strategic pillars, our operations, our activities. And then most importantly is reviving that sense of pride in our employee base, customer base and our shareholders and analysts are now beginning to believe. So that was one of our key things, is we believe in changing banking for the better. I think everyone now is starting to see that what something is happening at Laurentian Bank, they're starting to execute and we are rebuilding that trust that we had lost a few years ago. And so to our ESG journey, I'm really proud that I feel that I'm on the right path of building the bank I've always wanted to work for, Shelley and that I have a phenomenal team that is there to help me see that vision through.

Shelley: So as we conclude today's podcast, I really want to thank Rania for spending the time with us today. On behalf of our listeners and on behalf of PwC, thank you. I think those insights were fantastic and the thoughts that you shared around ESG, strategy and transformation, leadership and trust were extremely valuable. Lastly, but not least, thank you to our audience today. We hope you'll join us for the next episode and check out all of the podcasts on your favorite podcast app.

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Meet our guest

Rania Llewellyn has served as President and CEO of Laurentian Bank since October 2020. She took on the role following almost 25 years with Scotiabank. During her time at Scotiabank, she held roles including Executive Vice-president, Global Business Payments; Vice-president, Multicultural Banking; and President and CEO of Roynat Capital.

Marino Fremis

Meet the host

Shelley Gilberg is the Canadian Platforms Leader and a member of the extended leadership team at PwC Canada. Prior to her role as Platforms Leader; Shelley was the Canadian Leader for ESG Markets. As a consultant, she practises in the areas of strategy, transformation, finance and value creation. She focuses on private equity, pension fund and sovereign wealth clients as well as public-private partnerships.

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Shelley Gilberg

Shelley Gilberg

National ESG Markets Leader and Canadian Platforms Leader, PwC Canada

Tel: +1 250 298 5272

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