FTSE 100 boards should have at least one member from an ethnic minority by 2021—and FTSE 250 companies by 2024—according to the latest report from the Parker Review.
The report also calls for improved transparency and disclosure to ensure progress against the targets is properly tracked. A third recommendation calls on companies to develop a pipeline of talent ready for boardroom roles.
The report comes from Sir John Parker, originally part of the Davies Review looking at boardroom diversity, who has been examining ethnic minority representation at the highest levels in the UK’s largest companies.
The Parker Review publishes its findings in the same week that the prime minister Theresa May published a racial disparity report that revealed inequalities for black and ethnic minorities in Britain’s schools, workplaces, hospitals and justice system.
Sir John said boards were unrepresentative of contemporary Britain.
“Today’s FTSE 100 and 250 boards do not reflect the society we live in, nor do they reflect the international markets in which they operate. While we are making good progress on gender diversity in the boardroom, we still have much to do when it comes to ethnic and cultural diversity.
“Our report has identified clear commercial benefits in addressing this issue, and it is crucial to make progress in this area if we want Britain to continue to be at the forefront of global business.
“We also outline some business-friendly recommendations, which aim to not only increase the ethnic diversity of boards in the near term, but also develop a strong pipeline of candidates for the future. These recommendations received overwhelmingly positive feedback and we have now provided some practical tools to help boards implement them.”
Business minister Margot James said: “We are committed to working with the business community to create more inclusive workplaces from the shop floor to the boardroom and as this report clearly shows there is a lot more work to be done.
“I urge our largest companies to lead from the front on this issue and take up Sir John Parker’s recommendations to promote greater boardroom diversity to reap the economic and social benefits.”