FTSE 250 firms and private companies have ground to make up when it come to ensuring they meet a target for having at least one ethnic minority member on their boards.

The Parker Review shows nearly one fifth of the FTSE 250 have yet to find a single minority board member. Companies in the index were set a voluntary target to reach by December 2024. Though companies improved, a significant number have still to make progress.

Meanwhile, the UK’s largest 50 private companies face their own deadline of 2027 for appointing a single board member from an ethnic minority group. Only 46% had done so by the end of last year.

David Tyler, chair of the Parker Review, says both the FTSE 100 and FTSE 250 companies have made progress on diversity.

“We recognise that we might now be entering a more challenging period than previously because of our role.

“However, we have been encouraged to see that there has been a further rise in ethnic minority participation in the FTSE 350 over the last year, as in previous ones.”

In the FTSE 100, 95% of companies have met their Parker Review objective. Currently, around 15% of all directors in the top 100 companies are from an ethnic minority background. The figures appear to show that the majority of companies have accepted the benefits and need for diversity.

‘Willingness to engage’

Kit Bingham, head of board and CEO practice at headhunters Heidrick & Struggles, says: “The Parker report shows there is a real willingness to engage.” Though the FTSE 250 figure is 82% of boards, that proportion is up from just 22% in 2019.

“That shows they are buying in, they’re not rejecting this target, they believe in the principle and I genuinely think that boards see value in diverse perspectives in broad terms.”

Bingham writes in the Parker report update, Improving the Ethnic Diversity of UK Business, that some FTSE 250 companies have found it hard to make the right boardroom moves. With smaller boards, there is less rotation and therefore fewer seats opening up to fill with a minority director.

FTSE 250 boards generally have lower budgets so tend to wait for rotation rather than expand the number of boardroom seats. Boards also find themselves turning to non-traditional boardroom backgrounds, such as in digital and data analytics, or people with no public company experience at all.

There’s also a possibility that lower fees paid to FTSE 250 directors are affecting efforts to recruit from overseas.