The Parker Review of ethnic minority representation on the boards of the UK’s largest companies has warned laggards that there is still time to meet the December deadline of having at least one ethnic minority board member, or “one by 2021”.
The latest survey reveals that a small core of FTSE 100 members may be struggling to appoint a single ethnic minority member to their boards. That said, the FTSE 100 has edged closer to the target first declared in 2017.
A survey completed in November last year revealed 74 FTSE 100 members had met the target. Since then a further seven have made announcements revealing they too are now compliant. This is up on 52 companies with ethnic minority representation revealed in 2020’s January survey.
The review described the number as “significant progress”. Sir John Parker, chair of the review committee, said: “Achieving this result demonstrates committed leadership by FTSE 100 chairs, their boards, and the headhunting community, to align with the review’s ethnic diversity objectives. We would hope the remaining companies in the FTSE 100, who still have time to meet the target, will ensure they follow this encouraging lead and align with the business case that underpins the review.
“Corporate Britain, in my view, is becoming more comfortable with boardroom diversity. I believe too, that the majority of FTSE board leaders want British companies to be seen, not only as the best governed in the world, but also comprising of society’s best diverse talents.”
Lord Karan Bilimoria, CBI president and chair of Change the Race Ratio, says the work of improving ethnic minority representation remains unfinished, despite the efforts that have been made so far.
“FTSE 100 firms have made real headway when it comes to ethnic diversity at the top. It’s clear to see they’ve stepped up despite the challenges of Covid-19. Now we need to see those last few firms do what the large majority have done already and end the all-white boardroom.
“This is an important milestone, but not job done. Companies need to keep up momentum with actions to improve ethnic diversity at every level, developing talented future leaders from across society.”
‘Make the achievement sustainable’
However, some connected to the review remain keen to look forward to how representation can be maintained and not prove short-term measure to meet a target.
Sir Ken Olisa, an adviser to the Parker Review, highlighted the results of other surveys that have revealed work on talent pipelines is a necessary part of dealing with diversity issues in gender as well as ethnic minorities.
“The next challenge will be to make that achievement sustainable. There would be little point in hitting our target next December only for us to return to business as usual in January,” says Olisa.
“As the Hampton-Alexander Review and the work of Green Park have shown us recently, there is much more to be done on the pipeline, to bring minorities into executive committees and, ultimately, in the boardroom. Board diversity is a driver of competitive advantage—talent must rise up the corporate pyramid no matter what colour it is.”
A Green Park survey published last month revealed that despite progress in some areas, ethnic minority representation remains disappointingly low. Just 3.4% of people in chair, CEO and CFO roles are from ethnic minorities. Green Park chair Trevor Phillips said: “The snowy peaks of British business remain stubbornly white.” The Parker Review acknowledges that representation in functional roles remains an issue.
Pressure had been mounting on nominations committees to resolve the issue. At the beginning of 2019 then business minister Kelly Tolhurst wrote to FTSE 100 chairs calling them out on their failure to welcome non-white members to their boardrooms and warning that change had to accelerate if business was to avoid government intervention.
The FTSE 250 are now in the sights of the Parker Review. Members face a “one in 2024″ target and will be surveyed again this year.