Howard Sacarob, head of U.S. tax at Royal Bank of Canada and executive sponsor of RBC’s PRIDE employee resource group, joined Nate Carden, David Farhat and our “GILTI Conscience” team to discuss the importance of allyship in the workplace and community, as well as the challenges he has encountered and how perspectives on diversity have changed over the course of his career.
In this episode of the “GILTI Conscience” podcast, hosts David Farhat and Nate Carden are joined by associates Stefane Victor and Eman Cuyler, and Howard Sacarob, head of U.S. tax for the Royal Bank of Canada (RBC). Mr. Sacarob is also a member of RBC’s diversity leadership council and an executive sponsor of the Pride Employee Resource Group (ERG) at RBC, where he works to make diversity and inclusion central to the firm’s culture.
The participants reflected on obstacles they’ve faced in the professional world as individuals with diverse perspectives and identities.They discussed the strides that companies are making to prioritize DEI and bring everyone into the conversation while also acknowledging the difficulties that diverse individuals still experience in the workplace. Tune in for this special DEI spotlight on “GILTI Conscience.”
Key Takeaways
- The Benefit of ERGs: Implementing Employee Resource Groups (ERGs) is an effective way that organizations can foster a sense of community, drive culture and focus on common ground. According to Mr. Sacarob, ERGs aim to create an environment where people can be empathetic and understand what it’s like to be in someone else’s shoes. And so a lot of the programming that we do in our ERGs is around, uh, trying to establish, uh, those sorts of experiences.
- The Strength of Allyship: When younger employees see that there are individuals up the chain who look like them, they see that there is an opportunity for them to advance within an organization. However, allyship goes beyond finding someone who looks like you; it’s about having someone within the organization who gives you an indication that they are on your side and appreciates where you are coming from.
- Seeing Ghosts: When diverse individuals are denied an assignment or receive a tougher review, they may “see ghosts,” and ask themselves whether they were judged on merit or if a bias existed.
Voiceover (00:02):
This is GILTI Conscience. Casual discussions on transfer pricing, tax tradies and related topics. A podcast from Skadden that invites thought leaders and industry experts to discuss pressing transfer pricing issues, international tax reform efforts and tax administration trends. We also dig into the innovative approaches companies are using to navigate the international tax environment and address the obligation everyone loves to hate. Now your hosts, Skadden partners, David Farhat and Nate Carden.
Nate Carden (00:36):
Hi everybody. Nate Carden, David Farhat, Eman Cuyler, and Stefane Victor. As always, we are guilty conscience. Today we’re proud to be joined by Howard Sacarob, the Head of US Tax at Royal Bank of Canada, who’s going to join us for a DEI spotlight episode talking about his experiences, his career in tax and financial services. Howard, welcome to the show.
Howard Sacarob (01:00):
Well, thank you Nate. Nice to be here.
David Farhat (01:03):
First of all, Howard, thanks so much for joining us to have this conversation. You’ve had a fascinating career and it’s wealth of knowledge and experience there. One of the things I want to ask about is, in your journey through tax and through financial services, how have you seen changes, if any in DEI? Because I know still tax is one of the least diverse areas of practice or law. Have you seen any change or evolution over your time in tax?
Howard Sacarob (01:32):
Oh, tremendous, both in tax and in financial services. There’s a war for talent, as we all know. There’s greater sensitivity and interest in bringing on all perspectives, all points of view, all backgrounds. And firms are really leaning into that. And certainly in my department, really been fortunate in being able to hire a broad array of talent backgrounds. Half of us are accountants and the other half are lawyers. All sorts of cultural backgrounds and experiences. I think that there’s been a lot of change in that area.
Eman Cuyler (02:16):
Howard, you do a lot of work in this space, I know that you are part of the leadership council at RBC. Can you just tell us a little bit about the different initiatives and the type of work that you do there?
Howard Sacarob (02:28):
So I am an executive sponsor of our Pride ERG. ERG is an employee resource group. We have about seven or eight employee resource groups here in the New York, New Jersey area, which are part of our capital markets unit. One for women, one for multicultural, one for vets, for Pride and so on. And I’ve been part of the Pride ERG and an executive sponsor now for five years, and have been on the Diversity Leadership Council of the capital markets unit here in the US for the last few years.
Eman Cuyler (03:07):
Do you feel like this type of work is common amongst other financial institutions or are you guys the leaders in this space?
Howard Sacarob (03:16):
I would say it’s very common in financial services firms, particularly the big ones who understand, I think for a number of reasons. One is, they know that it’s important to their employees, particularly as we reach into the populations of 20 and 30 year olds where it seems to be increasingly important. It’s important to our shareholders, it’s important to our regulators, it’s important to a lot of our customers and clients, particularly institutional clients and municipal clients. They want to know what we’re doing in this space and they want to know that they’re being met with representatives of RBC who look like them and who have background similar to them.
Stefane Victor (04:04):
You talk a little bit about how things have improved. Can you talk specifically about how they were when you started your career and some of the challenges or some of the experiences you had?
Howard Sacarob (04:15):
Stefan, you’re probably trying to get a perspective on what it was like to be gay in the 80s in a financial services firm. Obviously, it was really different than it is now. I would say it was a little bit more of a don’t ask, don’t tell environment. The 80s and into the 90s, I was very, didn’t lie, but I wasn’t at all visible and I tried to keep a low profile. And obviously that’s very different now. And I think that the environment was not hostile, but it wasn’t friendly. And people in those circumstances, many of them felt awkward or felt that they shouldn’t present themselves in a way that would not be seen as acceptable or seen as different. Maybe that’s a big distinction between then and now. Now it’s like we celebrate differences, we want to know that people bring unusual or different perspectives and different backgrounds. That’s a reflection of the cultural change, but it’s also reflection of what we as lawyers are being asked to how we’re being asked to operate by staff and again, by our various stakeholders.
Stefane Victor (05:49):
So do you think that that pressure is coming mostly from the stakeholders or the staff? Is it like external or internal?
Howard Sacarob (05:57):
I think it’s all of those things. I think it’s partly cultural, and honestly, I do feel that what people might have gossiped or giggled about 30 years ago, is just not acceptable now.
David Farhat (06:13):
As I’ve gone through my career, it can be a bit of a lonely existence sometimes. You don’t deal with people who look like you, you’re trying to fit in, you’re trying to be a good tax lawyer and most tax lawyers don’t look like you, or most tax lawyers don’t have the same background.
Howard Sacarob (06:28):
Yeah.
David Farhat (06:29):
You wonder, “Am I being judged just on my merits or is there some bias there?” As you say now you can’t read people’s minds. So I think that concept has been referred to as seeing ghosts. So for instance, you don’t get put on an assignment or you get a tougher review or people are a little bit heavier handed with you than they are with your peers on reviews of memos and things like that. You say, “Well, is it because I’m not performing up to par or is it because of something else? Or is it because of who I am?” So have you dealt with that” and given that you’ve had kind of a very successful career, how have you dealt with those things and having that thought in the back of your mind, “Are people judging me because I’m different?” And navigated your career with... Or have you had those thoughts? And if you have, how have you navigated your career with that?
Howard Sacarob (07:23):
It’s more a matter of, I don’t have a wife and I don’t have kids to talk about and I don’t play golf. I don’t do any of the things, or I don’t have those normal experiences that most other people that I interact with might have. And so therefore, I might feel left out of conversation or I might feel that I don’t participate or not seen as participating, not part of the group in the same way that somebody who has those things would have. It’s not necessarily so much that I felt that I might have felt judged on that basis, but maybe I was left out of the conversation or left out of the workflow, which may end up leaving you in the same place as what you described.
Nate Carden (08:27):
How do in your organization and other organizations that you see, if organizations want to deal with that problem of background activities and lifestyle that is excluding people that we want to bring into the organization and to really create a sense of belonging, what are the things that people should be doing to try to break down some of those barriers?
Howard Sacarob (08:54):
So I think that’s where the ERGs can be helpful because they focus on trying to find common ground and common experiences or give people some common experiences and also sensitize them to the backgrounds and experiences of other people. And so for example, in our Pride ERG, some of the programming may be for the benefit of people who are not LGBT and who might not know much about LGBT life or maybe they have kids who are LGBT. But what’s important, no matter what area you’re talking about, is trying to create an environment where people can be empathetic, where, even if I don’t have your experience, I can understand what it’s like to be in your shoes. And so a lot of the programming that we do in our ERGs is around trying to establish those sorts of experiences.
Nate Carden (10:04):
So for those out there that are part of ERGs or supporting ERGs within their organization, what are the things that you think are really critical for them to do? And also, to the extent you can think of some to not do if they want to be successful? What works and what doesn’t?
Howard Sacarob (10:21):
ERGs give people an opportunity to meet others who are in other parts of the firm that they might not otherwise meet or interact with and learn something, learn something about themselves, have a nice time, establish a rapport with people they wouldn’t otherwise get to know, help foster a sense of community. All of those things are really important and they’re important to RBC as a matter of establishing and driving our culture. Culture is a really important thing for us, as I’m sure it is for a lot of firms. And we see the ERGs and the activities of the ERGs as a way of establishing and driving our culture of inclusion and representation.
Eman Cuyler (11:12):
Howard, something that you said that really stood out to me is the creation of inclusive space for diverse attorneys or for whoever the employees are. And I think speaking specifically for Skadden, we have a lot of different diversity groups and I honestly feel like they make a difference. For example, I’m a part of our Black Lawyers Committee. We have different programming throughout the year, and the firm really invests in that committee. And because of that, we get to meet, I’m in the tax group, but I have friends across different practice groups. So even though my specific group might not have hundreds of black lawyers, I get to meet and network and fellowship with diverse attorneys. We have lunches every month. So you get that sense of community throughout these programs. And I think having something like that is really a game changer for sure.
Howard Sacarob (12:06):
Yeah, I think that’s very parallel to what I meant to describe at RBC. I think it’s the same, it’s basically the same thing. One other aspect that’s worth mentioning, and I’m sure this has been one of the reasons that you’ve gotten so much out of that experience you just described, is seeing people above you who look like you and knowing that if they’re there, there’s opportunity for you to advance. And if there’s nobody up the chain from you that you can see that looks like you or has a similar background to you, I mean people wonder whether there’s a future for them. That’s something else that we really pay attention to.
Eman Cuyler (12:46):
Absolutely. Because you can’t aspire to things that you don’t see. So you hit her in the head.
Howard Sacarob (12:53):
Right. And frankly, that’s part of the reason I wanted act as an executive sponsor for the Pride ERG at RBC.
David Farhat (13:04):
So Howard are two things I want to pick on a little bit that you mentioned. One kind of talking about the community that these groups create and also talking about the representation, seeing folks who have done it before to let you know that you can do it. Kind of putting those together, it makes me think of allyship and mentorship. Because the way things have panned out in history, there aren’t always a one-to-one where you have someone up top that looks like you, that you can talk to. So I know for me, a lot of my mentors didn’t look like me, but some of them did. So can you kind of talk about the importance of A, the mentorship role, B, allyship and C, what you were talking about, a little bit about people speaking out? The importance of, like you said, you really wanted to be an executive sponsor of this, kind of the importance of people taking a stand and having these conversations.
Howard Sacarob (13:53):
All of those things are important, mentorship, having somebody above you or in a more senior role than you for the reasons that we just talked about. And as I said, that’s a large part of the reason I wanted to be executive sponsor. But I think allyship is key, really important. And you don’t know what people are thinking and if they don’t somehow telegraph support for you for where you’re coming from, you tend to think negatively, I think. And if they give you some indication that they’re on your side, that they understand, that they appreciate somehow where you might be coming from or express any sort of, “You’re okay with me.” I think that goes a long way. And if you don’t get that, you don’t know-
David Farhat (14:56):
You end up seeing ghosts.
Howard Sacarob (14:58):
Yeah, you end up seeing ghosts. I’ll give you an example that comes to mind of an experience I had. Early on when I joined RBC, I was having dinner with one of the senior people who was visiting from Toronto who I’d had a professional relationship with and had some interaction with and I think it was just the two of us. And he asked me what my wife did for a living. That’s one of those moments where you go, “All right, how do I answer that? I’m certainly not going to make up a wife.” And so I answered it pretty honestly and I said, I described, “I have a partner..” I had a partner at the time and it’s the same person. And so I explained what he did and clarified that it was a guy and I thought, “Well, gee, I don’t know how he’s going to react around that.” Is that going to be a problem for him?
(15:51):
I had no idea, didn’t know what to expect, didn’t know what it meant. And then the conversation proceeded. I lost a little bit of sleep over it, not really knowing potential consequences of that disclosure was, but that so be it, that that’s how life goes. And then maybe a year or two later, I was interacting with him again. We were chatting, he asked me how my wife was and I thought, “Well, there you go. Here I am obsessing about what somebody else is thinking about me and he doesn’t even remember.” So I mean, take from that what you will, but clearly people see ghosts, David, like you’re suggesting when the ghost makers or however we want to describe them, are oblivious. They’re oblivious, they’re not really paying attention to you as much as you think they’re or not paying attention to you in the way we think they might be.
David Farhat (16:48):
It’s interesting, and I like the term seeing ghosts. Because whether it’s real, whether the ghost is real or not, it has an impact on you. It has an impact on your work and has an impact on your day-to-day. And I think one of the points you made about community, one of the things I find I really appreciate about community, and not just community but also allies, is to be able to talk these things through. Because I can see someone coming up to you and having this conversation saying, “Well Howard, I don’t know what they think about me and blah blah blah.” And you going, “You know what, they’re probably not even thinking about you at all.”
Howard Sacarob (17:20):
Yeah.
David Farhat (17:20):
And that’s the value of the experience. I can think back to when I was a brand new attorney and how nervous I was about what people thought. I’m not going to say certain things and how I am now. You kind of speak up and understand consequences be damned sometimes. And what I’ve really enjoyed and because a lot of folks did this for me, and not folks who always looked like me, folks that looked very different from me, very different, but kind of spoke up on my behalf and kind of defended me. But it’s also, I think it’s a value to be able to listen to diverse attorneys or diverse folks in the tax area, hear their concerns, understand their limitations to speaking up and being a mouthpiece for them. That’s very, very valuable. Honestly, that’s part of the reason we do the DEI session on GILTI Conscience, just so that folks listening, diverse people and folks that are interested in allyship understand that these issues exist, that they can be dealt with. And I think it’s healthy to have the conversation.
Stefane Victor (18:23):
I was really struck by something that Howard talked about earlier because... And the biggest question that was in my head when you were describing your early career was, was there a Howard, was there a head of US tax who was a champion for different ERGs thinking as thoughtfully about diversity then as you are now?
Howard Sacarob (18:46):
No.
Stefane Victor (18:47):
And-
Eman Cuyler (18:47):
[inaudible 00:18:48].
Stefane Victor (18:48):
And so while you were-
Howard Sacarob (18:49):
[inaudible 00:18:49], I mean, maybe they were hiring women that was as far as they were going.
Stefane Victor (18:57):
Yeah. And so while it might have done you... While it have helped to get out of your own head, and just go for it and consequences be damned, I think that there’s something very real about maybe the lack of regard that people had for each other’s differences or some animus that people were actually holding against gay people and differences.
Howard Sacarob (19:21):
Stefane, I once had a boss who said to me, “You don’t have a family, you can work the weekends.” How do you read that? Do you see that..? What lens do you see that through? Is that hostile? Is that helpful? I really wasn’t sure what to make of that. He was not a nice person, I didn’t like him, but he was my boss for several years. And I mean, I was doing good work and the people I worked with liked me, liked working with me. But I think he thought he could take advantage of me because I quote unquote “Didn’t have a family.” And therefore I could work on the weekends.
David Farhat (20:03):
And I think stories like that are important, not just-
Howard Sacarob (20:07):
That wouldn’t happen, nobody would say that nowadays.
David Farhat (20:09):
I don’t think anyone would say it nowadays, Howard, but I think you would have the same behavior.
Howard Sacarob (20:15):
I hope not.
Nate Carden (20:16):
That’s not the question.
Eman Cuyler (20:17):
Right.
Nate Carden (20:17):
The question is not whether they say it. The question is whether they do it.
Howard Sacarob (20:20):
Or whether they think it
David Farhat (20:22):
Exactly right. Because I’ve had a conversation with a friend, he was closer to retirement age and he also worked in the big four. And he said, “You know what, I like that things are getting better. When I was coming up, I became senior manager and I was getting ready to take a client and my boss pulled me in to his office and I could tell he wanted to have a very uncomfortable conversation.” And he said, his boss said to him, “You deserve this client. This should be your client, but you’re not going to get it because they don’t like working with that category that they were in. They don’t like working with your kind.” And he said he was very offended. He went home and he was so upset. And he said it defined his career. And he was like, “I’m just happy that doesn’t happen anymore.”
(21:10):
And I said, “I think it still happens, but in some cases it might be worse.” And he said, “What do you mean?” I said, “Well, there’s a young person that’s like you, they become senior manager, they expect to get a file. And they don’t get it. And no one tells them why. At least, you knew you were qualified, you knew you deserved it, but it was someone else’s bias. Someone was the bad guy that didn’t give you this account. So you had somewhere to direct your rage. This young person now would never get told because everyone knows you get in trouble if you say that. Would never get told that this is why you’re not getting the file.” And this comes back to the seeing ghost comment. It’s like, so then that person is left to wonder, “Am I not good enough? Is it because of who I am?” And all of these things?
(21:55):
So I worry Howard, and this is why I think mentorship is important, that there are young people who they don’t get the, “You don’t have a family so you can work the weekend.” They don’t get that, but they always end up working the weekend when other people don’t.
Howard Sacarob (22:11):
Yeah.
David Farhat (22:12):
And they’re saying, “Well, is it because... Is this an opportunity? How am I supposed to read that?” And the other thing that’s important from that, Howard, I think most people wouldn’t even understand why saying “You don’t have a family, you can work the weekend.” Could be problematic or offensive. So when we’re talking about-
Howard Sacarob (22:32):
This guy may have felt that he was just stating a fact.
David Farhat (22:35):
Yeah, exactly.
Howard Sacarob (22:36):
He wasn’t judging. Right?
David Farhat (22:38):
Exactly. And some people may say, “Well, why is that offensive?” So this is why I think the different audiences of the conversation are important, because that could reach out to a young LGBTQ person who says, “Wow, I’m always working the weekend. Why is that?” And kind of help them with their seeing ghosts. And this could also go to a potential ally or someone who wants to be an ally to understand what language can mean to different people.
Nate Carden (23:07):
What are the things beyond what we’ve talked about before, what are the things you think organizations need to do to try to create a more inclusive environment? Few things that as somebody who’s now an organizational leader you think are really important for companies, professional services firms, whatever, who are really committed to driving change above and beyond, sort of all the great things you’re doing with ERGs and such? Just how do we move forward?
Howard Sacarob (23:35):
Well, I mean, that’s a challenge we’re all facing. Because no matter how good it is now, we want to report it, we want to keep the ball rolling, we think it’s really important to figure out how to get people at all levels within the organization, on the team, so to speak, and in the message. In other words, you’ve got high level senior people who know how important it is and who talk about how important it is to drive these kinds of change. And you’ve got more junior people who are agitating for that engagement, for that change, and have high expectations for how people will operate within that space. But can be challenging in the middle, because those middle people are focused on their careers, focused on their own growth, are focused on their world and may not be as sensitive or as empathetic to these other interests that they ought to be. And that’s where the real challenge is.
(24:52):
And part of that is about time and making time. We find that all of this ERG work and diversity work is really important. It’s work and it’s on the side of your desk and you’re competing with the work you’re paid for. And so some of us at RBC, some of us talk about, well, we’re working that 25th and 26th hour to do this kind of important, what we consider to be equally important work, but figuring out how to prioritize it in a way among all of the things that we each have to do is a huge challenge. And all I can say is, you got to keep talking about it at all levels, and make it important in how you compensate people, how you judge people for performance reviews and advancement.
David Farhat (25:46):
Howard, thanks so much. It’s been a pleasure working with you in all of my stops, IRS, and thank you so much for taking the time to do this and sharing your experiences with us.
Howard Sacarob (25:58):
Yeah, no problem. Thank you
David Farhat (25:59):
Everyone. Thanks so much. As always. This is GILTI Conscience. Thank you for joining.
Voiceover (26:05):
Thank you for joining us for today’s episode of GILTI Conscience. If you like what you’re hearing, be sure to subscribe and your favorite podcast app so you don’t miss any future conversations. Skadden’s tax team is recognized globally for providing clients with creative and innovative solutions to their most pressing, transactional planning and controversy challenges. Additional information about Skadden can be found at skadden.com.
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