Women and people from ethnic minorities fail to make it into pipeline roles that can lead to top executive positions, according to new research.

The Green Park Business Leaders Index 2024 reveals “cause for optimism” about the representation of women and people from minority ethnic groups in top business jobs. But the consultancy’s experts argue they are on a “B road” to the top, because they are “under-represented” in many pipeline roles.

Raj Tulsiani, chief executive of Green Park, says: “Organisations ebb and flow in terms of representation and, if you look at the bigger picture, you often see the pipeline being less diverse than the Top 20 or the Top 3 [roles].

“It means organisations are filling in from the top, largely through non-executive appointments. More worryingly, it shows they’re unable to create the right career pipeline lower down the organisation.”

Sir Trevor Phillips, chair of Green Park, says the last ten years have seen significant improvement in the recruitment of women and ethnic minority talent. But progress is not uniform and the “picture remains patchy”.

‘Determined action’ required

“Some sectors,” Phillips says, “have embraced change and sought it actively. Others have remained passive, assuming that things will change organically. They don’t. We believe that our businesses will benefit from a clear picture of where we are succeeding and where we are failing; as with every other part of our businesses, good data is the foundation of good policy. And success does not come from just hoping for better outcomes; it follows determined, intentional evidence-based action.”

Green Park’s survey finds that ethnic representation across the top 3 management roles (chair, CEO and CFO) is about 8% in the FTSE 100 and only 4% in the FTSE 250.

Meanwhile, the past ten years have seen women improve their foothold in the top 3. In the FTSE 100, they now hold 17% of chair positions, compared with 1% in 2014.

They also occupy 9% of CEO jobs, up from 3%. The biggest change, though, has been in leading finance: 23% of finance director jobs are held by women, compared with 6% a decade ago.

Globally, opportunities are improving for women too. Recent research by data providers MSCI found that women now hold 25.8% of board seats around the world, but struggle to access the top jobs. Only 9.1% of board chair roles are held by women, and only 6.5% of CEO jobs.

In other research, academics have concluded that “mandatory” quotas for female representation https://boardagenda.com/2024/02/07/female-board-quotas-improve-employment-practices/ work to change attitudes in the recruitment process.

Research elsewhere has also found that too few women access jobs that lead to the most senior roles. A survey by campaign group 25×25 finds that 44% of FTSE 100 chief executives are former divisional heads. And yet women account for only 9% of current divisional leaders.

Ethnic minority targets

Last year, the Parker Review challenged FTSE 350 boards to ensure they set targets for ethnic minority representation among senior managers and begin disclosing data on how many leadership roles are held by directors from minority groups.

Another headhunter, Heidrick & Struggles, recently published its own survey, showing that only 1% of the largest UK companies have a CEO from a minority group.

One factor that may be affecting the progress of diversity in UK companies is the argument over why it is important. In recent months, there has been a clash between those attempting to show it improves performance, and those that argue “performance” is not the issue at stake. Alison Taylor, a professor at NYU Stern School, insists the point is “inclusion, dignity and respect”.

There is a powerful case that all sectors of society should be reflected in business leadership. Boards then look like their workforces and their customers. Green Park’s research suggest we might be heading in the right direction. But there is work to be done.