Ethnic diversity in Britain's top 100 companies improves, Parker Review shows

A NEW survey revealed that Britain's top 100 companies have made significant progress on improving the ethnic diversity of their boards despite the pandemic affecting recruitment processes.

The survey of FTSE 100 companies by the Parker Review committee, published on Friday (12), found out that 74 of top 100 companies had ethnic minority representation on their company boards as of 2 November 2020.

Besides, seven companies had appointed directors from a minority ethnic group by early March 2021.

The survey showed that 124 out of the 998 board positions, across the top 100 companies, are held by 118 ethnic minority (12 per cent) directors, compared to 95 directors in 2020. Among them, 54 (46 per cent) are women, an increase of 42 per cent compared to 2020.

Chaired by Sir John Parker and sponsored by EY and Linklaters LLP, the Parker Review Committee was commissioned by the department for business, energy & industrial strategy (BEIS) in 2015 to consult on the ethnic diversity of UK boards.

In its first report, published in 2017, the review made a series of recommendations and set a ‘One by 2021’ target for all FTSE 100 boards to have at least one director from an ethnic minority background by December 2021.

Sir Parker said: “This survey of FTSE 100 companies represents significant progress towards the target. 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.”

Business secretary Kwasi Kwarteng said: “The progress made in the past year to increase ethnic diversity on FTSE boards is very promising, particularly given the difficult circumstances businesses have been facing.

“FTSE companies are seeing the benefits of diverse leadership teams first-hand as we build back better from the pandemic. We hope more companies harness this momentum to go further and faster to ensure our boardrooms are fully representative of British society.”

Responding to the survey, Lord Karan Bilimoria, president of  Confederation of British Industry (CBI) and chair of Change the Race Ratio, said that companies have made real headway when it comes to ethnic diversity 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. Companies need to keep up momentum with actions to improve ethnic diversity at every level, developing talented future leaders from across society," he said.

“Our Change the Race Ratio campaign exists to help businesses to improve, not only to measure their progress, so I encourage all companies to sign up.”

Sir Kenneth Olisa, advisor to the Parker Review, said that the target of ‘One by 21’ is now within reach and the next challenge is to make it sustainable.

Arun Batra, EY partner and CEO of the national equality standard, said: “At the latest count, we have 81 FTSE 100 companies who have diversified their boards. But there can be no rest, until all companies have met the ‘One by 2021’ target."