New data from the Parker Review committee reveals that ethnic minority representation is growing in FTSE 100 firms, where 74 FTSE 100 companies had ethnic minority representation on their boards as of 2 November 2020. Still, progress has been slower in other areas.
This year’s data carries more weight considering the ‘One by 2021’ target, a goal established in 2017 that each FTSE 100 Board should have at least one director of colour by 2021, is coming to a close. While FTSE 250 firms weren’t included in the survey, they have their own “One by 2024” target.
Diversity on FTSE 100 boards
By March 2021, seven more FTSE 100 firms had hired directors from minority backgrounds despite the effect of COVID-19 on recruitment.
The survey revealed firms were picking up the pace on representation with 21 companies, as of 2 November 2020, still required to meet the December 2021 target compared to 31 the year before.
Of the firms that failed to respond to the latest survey, there were three this year compared to four the year before, which shows they are getting more proactive about dealing with representation. The survey also found that seven more FTSE 100 companies “have made announcements that they joined their peers in meeting the target since November 2020,” which shows a growing willingness to publically engage in D&I.
The survey also found that 124 out of the 998 board positions across the FTSE 100 companies that responded are held by 118 directors from an ethnic minority background compared to 95 directors in 2020, a circa 22% rise in diverse representation this year. Of the 118 ethnic minority directors, 54 are women of colour (46%), which is up by 42% compared to the year before.
Despite these promising statistics, “progress remains slower in the key functional roles of boards,” where only five ethnic minority directors are a CEO – and all of them men. This is down from six ethnic minority directors that held a CEO or Chair position in 2020.
Achieving diverse representation at Chair and CEO levels on FTSE 100 boards is still lacking, especially for women of colour, where the 2020 Review’s recommendations “on measuring board-level diversity and helping to build a pipeline of board-ready candidates” will remain relevant this year and beyond.
Sir John Parker, Chairman of the Parker Review Committee, said: “This survey of FTSE 100 companies represent 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 added: “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.”
Lord Karan Bilimoria, CBI President and Chair of Change the Race Ratio, also responded to the new data: “FTSE 100 firms have made real headway when it comes to ethnic diversity at the top. It’s clear to see they’ve stepped up 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.
“This is an important milestone, but not job done. Companies need to keep up the momentum with actions to improve ethnic diversity at every level, developing talented future leaders from across society. 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.”