Diversity is falling among new director hires for the largest 150 companies listed in the FTSE, according to new research.

The most drastic fall is for ethnic minority directors, who have been appointed to only seven (4%)—of 196 new director appointments in the year to April 2024. This from a high point of almost 30% in 2022, according to consultancy Spencer Stuart.

Women accounted for 60% of new appointments two years ago but the figure is down to 49% this year. The proportion of “first-time” directors has also dropped from 44% in 2022 to 26% this time around. Age diversity has also fallen. Last year, 12% of new appointments were under the age of 50; this year, the proportion is 6%.

According to Shami Iqbal, UK managing partner at Spencer Stuart, the numbers represent a “slowdown in progress on minority ethnic representation on UK boards”.

There are worries that the falling number of ethnic minority appointments represents a return to a “one and done” approach following the Parker Review, which set a target of all FTSE 100 companies having at least one director from an ethnic minority background by December 2021, and by December 2024 for FTSE 250 companies.

One and done?

Iqbal says: “Diversity means having talent around the boardroom table representing a wide range of views and backgrounds, seeing this as a strength and leveraging this talent to the company’s advantage. While the Parker Review results show concerted action, boards must be careful not to adopt a ‘one and done’ mentality.”

Spencer Stuart also finds that only 24% of the four senior boardroom roles—CEO, CFO, chair and senior independent director (SID)—are held by women, though the figure is up from 20% last year.

Also rising is the proportion of these jobs going to women among new appointments—43% against 34% a year earlier.

However, Spencer Stuart unearths another startling statistic: 113 boards have men in both the CEO and chair roles; only three boards have women in both the top jobs—Man Group, Pennon Group and Severn Trent.

Spencer Stuart’s report says the SID has become a focus for boards attempting to meet the Financial Conduct Authority’s call for boards to have at least one woman in either the chair, CEO or SID position.

Despite the number of female boardroom chairs not changing year on year, Spencer Stuart remains optimistic.

“We continue to believe that the pipeline for potential chairs is growing as more and more women accumulate significant experience as PLC non-executive directors, SIDs and committee chairs.”

Women dominate remuneration committee chair roles (70%), they hold 36% of audit committee chairships, and 57% of SIDs.