Significant progress on improving diversity of boards - report
Nearly three-quarters of FTSE 100 companies have improved ethnic representation across their boards since January of last year, according to a new report.
The Parker Review committee published the results of its latest survey of FTSE 100 companies, carried out jointly with the Department of Business, Energy & Industrial Strategy (BEIS).
The report, an independent review published annually, showed that there has been significant progress across FTSE 100 companies with regards to improving ethnic diversity on their boards, all despite the effects of Covid-19 on board recruitment processes.
Seventy-four FTSE 100 companies were found to have ethnic minority representation on their company boards (as of 2 November 2020), as well as a further seven companies appointing a director from an ethnic minority group by March 2021.
This put many companies across the board in a position to meet the review 's 'One by 2021 ' target, which urges big firms to have at least one director from an ethnic minority on its board by the end of this year.
Arun Batra (pictured), EY partner, CEO of the National Equality Standard and adviser to the Parker Review commented: “I am proud that the UK business community is making real progress and that 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. Good corporate leaders are agents for change and use their position of power, privilege and influence to turn intent into action. ”
In addition, the report showed that 124 out of the 998 board positions, across the FTSE 100 companies that responded to the survey, are held by 118 ethnic minority directors, compared to 95 directors in 2020.
Of the 118 ethnic minority directors, 54 (46 per cent) were also women, which is an increase of 42 per cent compared to 2020.
However, despite the many achievements, the report also recorded slower progress in the key functional roles of boards.
Across the FTSE 100 companies that responded to the survey, only five ethnic minority directors occupy a chief executive position (compared to six ethnic minority directors that held chief executive or chair positions in 2020), all of whom are men. Two occupy a chair role, one man and one woman, and four men occupy a chief financial officer role.
Sir John Parker, chairman of the Parker Review Committee, 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. ”
While FTSE 250 companies were not included in this latest study, they will be surveyed towards the end of 2021 as they work towards a “One by 2024 ” target.
View the full report here