Firms failing on board diversity
MAJOR companies will struggle to meet a target of appointing a non-white director by 2021, a report warns today.
The Parker Review, launched in 2016 and which set the target the following year, revealed that over a third of FTSE 100 boards lack ethnic representation.
Although 11 more blue chips now have an ethnicminority director compared with three years ago, progress has been “slower than hoped” with 37 per cent with no representation.
Medium-sized firms are doing worse. In the FTSE 250, 69 per cent have no ethnic diversity on boards.
Review chairman Sir John
Parker said that more work was needed to reap the benefits of diversity and needed the same level of focus that led to more women on boards. He said: “Too many of us, I fear, remain complacent that change will come about naturally through the passage of time. Most of us know this never works in any other aspect of our businesses; and it won’t work here.
“The suspicion is that our company cultures are not actively encouraging talented minority executives and non-executives to choose roles in our businesses when they feel they can leave corporate life and do just as well as entrepreneurs, without some of the responsibilities.”
The review urged FTSE 350 companies to “engage constructively” after a few failed to respond to a request for data.
It wants recruiters to be “much more proactive in ‘marketing’ highly talented ethnic minority candidates” and such senior managers to be mentored.
Research from the Financial Reporting Council in the review found just 14 per cent of FTSE 100 companies and 2 per cent in the FTSE 250 set measurable objectives for board ethnic diversity. Of those that do, no firms report progress against them.
Dr Jill Miller, at HR professional body CIPD, called the situation “unacceptable” and demanded “systemic change”.