BMO Replacing “Diversity” with “Inclusion” Isn’t About DEI Backlash – And Why It Matters

Quick Insights:

• BMO dropped “diversity” from their core values, but it’s not because of DEI backlash

• The issue isn’t political. It’s strategic.

• Changing core values is a major trust event

• Values don’t change because they’re hard. They change when they no longer serve.

• True values are discovered through what an organization is not willing to compromise

• Diversity and inclusion are not interchangeable 

 A couple of weeks ago, the Toronto Star reported that at an internal presentation, the Bank of Montreal’s CEO, Darryl White, told employees that “inclusion is replacing diversity” among the company’s core values because “corporate interpretations of concepts like diversity have become too input focused. Inclusion is more holistic, more outcome focused.”

Interestingly, the Star wasn’t able to verify whether the change was triggered by Trump’s executive order to eliminate DEI policies, yet they still titled the article “BMO drops the word ‘diversity’ from its core values amid DEI backlash.”

The Real Issue Isn’t Political. It’s Strategic.

Here’s what likely happened.  

On September 9, 2020, BMO announced its five-year goals for its “Zero Barriers to Inclusion Strategy and Workforce Representation Goals.” These “ambitious” (their words, not mine) goals followed their previous diversity strategy in which they achieved four out of five targets.

To me it seems far more plausible that BMO significantly fell short of its diversity goals. But instead of addressing that head-on, they reframed the narrative with meaningless corporate phrasing, revealing a fundamental misunderstanding of what corporate values actually are.

Why Diversity and Inclusion Aren’t Interchangeable.

Diversity is measurable.  

Diversity measures who is in the room. It looks at demographics, representation percentages, hiring outcomes, promotion rates, differences in pay equity, the composition of boards and leadership teams.

It’s concrete. It’s trackable. It’s either happening or it’s not.

Inclusion is cultural.

Inclusion measures how people feel in the room. It addresses needs belonging, psychological safety, respect, and being heard.

It’s nuanced. It’s experiential. It’s about environment, not just representation.

Diversity and inclusion are deeply connected, but confusing them dilutes both.

You can have diversity without inclusion. It shows up as representation without safety.

You can have inclusion without diversity. It shows up as a culture that feels warm but never becomes fair. 

Both fail the organization and its people.

Diversity without inclusion creates a fragile environment where people are present in number but silenced in experience. Representation exists, but psychological safety does not. This leads to disengagement, turnover, and the loss of the very perspectives diversity was meant to bring.

Inclusion without diversity creates a comfortable but homogenous culture. People feel supported, yet nothing fundamentally changes. Innovation stalls, blind spots grow, and the organization misses the competitive and ethical benefits that come from a truly diverse team.

And this is where values meet measurable impact. 

Research from McKinsey shows that ethnically and racially diverse executive teams are 36% more likely to create financial returns above their industry mean, and that the companies with the highest percentages of women as leaders are 25% more likely to outperform their industry mean.

Diversity fuels innovation, fairness, and performance.

But it cannot survive without inclusion.

 The Trump Question

Why don’t I believe this has anything to do with Trump?

Because if it did, the first thing BMO would do is change their external language on its corporate and career sites – so Trump would think they’ve moved away from DEI policy. But they haven’t touched their external messaging.

Why change diversity to inclusion internally if the goal is external appearance?

Changing Core Values is a Major Trust Event

BMO’s announcement matters because changing a core value is not a small shift in messaging or strategy. Strategies evolve. Products evolve. Core values are not meant to. They represent the heart of an organization.

Ralph S. Larsen, former CEO of Johnson & Johnson expressed this stunningly:

“The core values embodied in our credo might be a competitive advantage, but that is not why we have them. We have them because they define for us what we stand for, and we would hold them even if they became a competitive disadvantage in certain situations.”

This is what makes BMO’s shift so concerning. If a core value changes with no transparent explanation, for a reason that lacks clarity and meaning, the foundation of trust weakens.

In this moment in time, public trust is incredibly fragile. 

While banks still maintain relatively high trust, swapping core values without coherence risks shaking that stability.

Core values aren’t flexible. They’re not marketing language that you adjust when the winds change. They’re not goals you set and miss. They’re not PR positioning you modify when there’s external pressure.

Core values are not something you decide. They are something you discover.

They reveal themselves through what you actually do when no one is watching; what you won’t compromise on when it’s expensive or inconvenient. They are the principles that guide your toughest decisions.

Most leaders genuinely believe that their company values are alive in the day-to-day. Most employees are not convinced. 

As Gustavo Razzetti notes in his excellent article “All Talk, No Action,” an MIT study found that less than 25% of organizations actually connect their values to real behaviours – and most don’t link those values to business outcomes at all.

Think about how many organizations are letting their own potential slip through their fingers.

The magic isn’t in having values; it’s in living them. The world’s most loved organizations, think IKEA, Costco, Patagonia, treat their values as operating principles, not posters. And the benefits speak for themselves.

If you’re wondering if your company’s values would pass as true core values, run each of your values through these three questions:

1. Would I keep this value if it cost me a major client, significant revenue, or public criticism?

If no, it’s not a core value.

2. Can I point to three times in the past year when this value guided a difficult decision?

If no, it’s not a core value.

3. Could my team articulate this value and give examples of how it shows up in the organization without preparation?

If not, it’s not a core value.

Real values will pass all three tests. Performative values will fail at least one.

When Core Values Should Change (and When They Shouldn’t)

Because core values are at the heart of an organization, they rarely, if ever, need to change.

Sometimes, however, changing a core value is inevitable.  

When?

• When it no longer resonates with employees or customers

• The stated value and lived culture are misaligned

• Technological or societal shifts render it irrelevant

• Ethical or experiential realities evolve

But when you haven’t met your goals because you’ve been overly ambitious?

You don’t replace it.

You translate it into behaviours people can see.

You set more realistic goals.

You celebrate employees who live it so others can model it.

You exhaust every effort before altering a core value.

What BMO Could Have Done Instead

Option 1. It could have owned the change, honestly and openly. 

It may have sounded something like this: “We’ve learned that representation alone is not creating the belonging that we’re after. We’re not abandoning diversity. Instead we’re nesting it within a larger inclusion strategy. Here’s what it means operationally…

Option 2: It could have added inclusion to its values

“Diversity alone is not enough, but neither is inclusion. We’re choosing to hold both as distinct, interdependent priorities so we can track representation and meaningful belonging.”

Option 3: Admit the miss and recommit to it authentically

“We fell short of our diversity goals, not because it’s unimportant, but because its importance drove us to aim too high. We’re recommitting to the real work of diversity and giving it the extended timeline it needs.”     

Acting in any of these ways would have helped BMO maintain its integrity. It may have even shown other CEOs what real leadership looks like.

Actionable Steps You Can Take Today

The lesson to be learned from BMO isn’t about diversity or inclusion. It’s about the integrity of your core values; about whether your core values drive real decisions and behaviours or fade under real-world pressure. 

This is what authentic values looks like:

1. Notice actual behaviour. Discover your company’s core values through examining your actual behaviour. What are the principles driving behaviour throughout your organization – in your product or service, sales, marketing, the delivery of your product/service, culture, and finance.

2. Name them. They don’t have to be trendy or impressive. They have to be honest.

3. Test them. See above – the Test for Real Core Values.

4. Clarify them. Make sure your organization is aligned on what your core values mean.

Values aren’t what you wish your company stood for. They’re what it actually stands for when standing costs something.