More needs to be done to achieve diversity in executive roles
A newly published government-commissioned report shows that while the majority of FTSE 100 firms have reached boardroom diversity targets, most companies are still lacking diversity in their executive roles.
The report confirms that nearly all FTSE 100 boards have met ethnic diversity targets which were set by the government’s Parker Review. The Parker Review Committee is led by Sir John Parker and is committed to urging business leaders to improve the ethnic and cultural diversity of UK boards to better reflect the communities they serve and their employee base.
The results of the committee’s latest voluntary census on the ethnic diversity of FTSE 100 and FTSE 250 companies’ boards, which was conducted in collaboration with the Department of Business, Energy and Industrial Strategy (BEIS), found that almost all FTSE 100 companies have met the Parker Review’s ‘One before 2021’ target to improve ethnic diversity of FTSE 100 boards.
The target of having at least one director from a minority ethnic background by December 2021 was set by Sir John Parker in 2017. A similar goal was set for FTSE 250 boards, with a 2024 deadline.
In response to the report, Sir Parker said: “The progressive leadership in FTSE boardrooms deserves our congratulations and fulsome praise for their positive response to a range of initiatives over the past decade including this review.
“Their success places UK listed companies at the forefront of global governance, gender and ethnic diversity. This will be a winning combination in a competitive world with fast-changing demographics.”
However, despite the diversity successes within FTSE 100 boards, the report also found that when it comes to executive roles, most companies are yet to have sufficient minority ethnic background diversity.
The recently released government-commissioned report follows an earlier report that shows between 2014 and 2019, almost 4 in 10 UK organisations had no ethnic minority representation on their executive teams at all.
The 2020 Colour of Power report found that just 51 of the 1097 most powerful roles in Britain were held by people from BAME backgrounds. A breakdown of the positions found there were zero BAME chief constables, zero BAME CEOs in the top 50 NHS trusts, and zero BAME CEOs at the 15 national sporting bodies.
Research has repeatedly found a robust business case for embracing racial diversity at executive levels. McKinsey’s series investigating the business merits for diversity shows that the relationship between diversity on executive teams and the likelihood of financial outperformance has strengthened over time.
The Parker Review confirms how progress is being made in relation to diversity and UK boards. However, it also shows that more needs to be done to address diversity at an executive level.
Crafting better inclusion strategies, such as ensuring the CEO positions themselves as the top champion for diversity and inclusion efforts and holding leaders accountable for driving diversity and inclusion outcomes, should be prioritised within organisations.
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