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Top firms failing to increase number of ethnic minority directors

FTSE 100's number of BME leaders falls in first annual update on Parker review.

The number of FTSE 100 company directors from ethnic minority backgrounds has declined in the past year, according to a progress report delivered by the government-backed campaign to boost boardroom diversity.

Just 84 of the 1,048 director positions in the 100 biggest companies on the London Stock Exchange are held by a business leader from an ethnic minority, down from 85 last year, in the latest sign of stalling progress to make big companies more representative of the country at large. The figures were compiled for the first annual update on the Parker review, which last year set a target for the FTSE 100 to appoint at least one board-level director from an ethnic minority background by 2021.

Progress has gone into reverse, however, suggesting time is running out for companies to hit the voluntary target and that more action must be taken. The majority of FTSE 100 boardrooms still have no ethnic diversity at all. Fifty-four of the 100 firms do not have a single board director from an ethnic minority background, up from 51 a year ago.

Overall, 8% of the directors of top firms are from ethnic minorities, but UK citizens from such backgrounds account for just 2% of roles, despite making up 14% of the population. Sir John Parker, the chairman of the mining company Anglo American, who conducted the review, said he was braced for only limited progress in the first year, but warned companies they now needed to take action.

"We've got to make real progress. The purpose of this update is really to alert again, and to make business leaders even more conscious they need to step up," he said. The figures come a day after Theresa May unveiled plans that could force big employers to reveal their race pay gap statistics, in an extension of the rules obliging companies to publish their pay gaps between men and women. The government has come under growing pressure to reform corporate governance rules amid growing distrust of big business, stoked in the decade since the financial crisis by rising inequality, the imposition of austerity, and several corporate scandals such as the collapse of Carillion.

May's reform agenda has, however, faced sharp criticism from Labour, which has called for a far more radical overhaul of corporate Britain, including putting workers on boards and forcing the transfer of company shares to workers. There has been progress to increase the number of women on boards, although this also appeared to stall earlier this year when a study from Cranfield University revealed a sharp drop in the number of women holding top corporate jobs.

Despite concerns over the lack of progress, businesses continue to warn against using government-enforced quotas, similar to those used in some other countries. Parker said: "A voluntary target is worth 10 quotas. I'm against them and I don't think that professional people want to be there because there is a quota.

Source: The Guardian 

Päivitetty/Updated: 12.10.2018




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