Nearly all FTSE 100 companies have reached a target of having at least one board director from an ethnic minority background.
According to the Parker Review, a voluntary census, 89 of the top 100 companies in the UK had ethnic minority representation on their company boards as of December 31 last year.
Of the 11 companies who missed the target date, five have subsequently announced the appointment of a director from an ethnic minority background, and an additional three are at an advanced stage in the recruitment process.
Of the three groups who have not signalled their commitment to the census, one is being acquired by a US company and will de-list, another is a Russian company that is to be removed from the FTSE 100 shortly, and the final one is a UK subsidiary of a US-based group.
The progressive leadership in FTSE boardrooms deserves our congratulationsSir John ParkerThe review said the majority of these board positions are non-executive, which is “as expected” given that FTSE companies generally only have two executive director positions, chief executive and chief financial officer.
It added that progress in these executive areas is slow, and recommended that continued attention is focussed on this issue.
The Parker Review
The Parker Review was commissioned by the Department of Business, Energy and Industrial Strategy in 2015 to consult on the ethnic diversity of UK boards, and is chaired by Sir John Parker and sponsored by EY.
In its first report in 2017, the review recommended a "one by 2021" target for all FTSE 100 board to have at least one director from a minority ethnic background by December 2021, and a “one by 2024” for all FTSE 250 boards.
Parker said this milestone year shows the “extraordinary sea change” within listed companies regarding diversity and inclusion.
“The progressive leadership in FTSE boardrooms deserves our congratulations and fulsome praise for their positive response to a range of initiatives over the past decade including this review.
“Their success places UK listed companies at the forefront of global governance, gender and ethnic diversity.”
Kwasi Kwarteng MP, secretary of state for BEIS, added that the aim is to foster a business environment in the UK where people have equal opportunity to succeed and progress in their career through merit and ability, rather than their ethnic background.
“While there is still more to do, today’s findings demonstrate the great strides being made - particularly at FTSE 100 level - to increase ethnic diversity on boards, as more of Britain’s biggest companies recognise the business case for diversifying their teams so that they better reflect the society we live in.”
Andrew Ninian, director of stewardship and corporate governance at the Investment Association, said: “We know that companies with more diverse leadership teams deliver better long-term returns, and it’s welcome news that the vast majority of FTSE 100 companies are now meeting the Parker Review target”
He said diversity needs to be embedded throughout senior leadership teams, and leaders at all FTSE companies should be encouraged to continue to consider how they can best create a culture of diversity and inclusivity at all levels in their organisations.”
“While commendable progress has already been made at FTSE 250 companies, we urge the remaining boards to take the steps necessary to diversify their composition, and meet their target by 2024.”
Still time to enter our 2022 Diversity Awards!
Now in their fourth year, the FTAdviser Diversity In Finance Awards are open for entries.
The DIFAs have been designed to celebrate individuals in financial services and UK financial services companies who have taken active steps towards a more inclusive, diverse and fair industry that works better for all stakeholders: colleagues, customers and the community.
Awards will be given to those individuals who have demonstrated their support for minority groups and their tireless efforts to promote and inspire those who are otherwise under-represented, as well as recognising companies whose policies, schemes or initiatives encourage and enable diversity in the workplace.
This is an opportunity for FCA-regulated, UK-based companies, large and small, to show how they are getting it right, and for employees to gain the recognition they deserve. For more information and to enter, click here.
sally.hickey@ft.com
