Market Tracker Trend Report: Ethnicity in Corporate Governance Reporting 2020

Market Tracker Trend Report: Ethnicity in Corporate Governance Reporting 2020

Click here to download the full report in PDF format

This Market Tracker trend report examines the current recommendations and guidelines for public companies in relation to ethnic diversity reporting in the UK, focusing on how these have been interpreted, implemented, and reported on by FTSE 100 constituents. The report also examines recent and upcoming developments anticipated to have an impact on this area, and provides companies with ‘best practice’ guidance in advance of the upcoming target deadline set by the Parker Review for FTSE 100 companies to have at least one ethnic minority director on the board by the end of 2021.

 

What does the Market Tracker trend report cover?

  • an overview of ethnic diversity targets and reporting requirements for public companies
  • an examination of the common challenges experienced in relation to definitions, terminology, and data collection
  • in-depth analysis of the quality of reporting against the Parker Review recommendations in FTSE 100 annual reports
  • a review of the quality of ethnic diversity disclosures in annual reports
  • an examination of how companies are identifying and reporting on measurable objectives to increase diversity within the organisation
  • example ‘best practice’ extracts from recent FTSE 100 annual reports
  • a summary of recent and upcoming legal and regulatory developments, such as the Race at Work Charter, the government’s position on ethnicity pay gap reporting, increased investor pressure to maintain an ethnically diverse board, and the FRC’s updated guidance on board diversity reporting
  • practical guidance for companies on a range of hot topics, including grappling with definitions, points to consider for nomination committees, measuring progress and setting specific targets, taking positive action to increase diversity and inclusion, championing ethnic diversity in recruitment, and successfully conducting ethnicity pay gap analysis

What are the highlights from the report?

  • the Parker Review was referred to in 54% of FTSE 100 annual reports. However, only 35% of annual reports clearly stated they met the Parker Review target and only 24% of annual reports provided clear supporting data, with a significant number of companies appearing to rely on photographs, names or nationality data
  • 26% of FTSE 100 companies reported on nationality but made no separate reference to ethnicity
  • while 98% of FTSE 100 companies had a board diversity policy (BDP), 25% of annual reports did not refer to ethnicity in the BDP
  • 42% of FTSE 100 companies included measurable objectives that went beyond the Parker Review target; of these companies, 54% had not met the Parker Review target. 63% of the companies providing detailed measurable objectives also reported on progress towards these objectives
  • the most common objectives adopted to increase ethnic diversity were a commitment to using search firms to ensure diverse candidate recruitment, and reviewing succession plans to ensure a diverse talent pipeline
  • 33% of FTSE 100 companies included objectives regarding ethnicity across the wider workforce and 50% of companies introduced wider initiatives to enhance or increase diversity and inclusion, including ethnic minority employee networks and groups, and enhanced support in the form of monitoring, feedback, mentoring, and training and development opportunities

Market commentary

The report contains expert commentary and practical tips from:

  • Richard Preston, Addleshaw Goddard
  • Dinésha Mendis, Diversity Project
  • Selina Sagayam, Gibson Dunn
  • Pavita Cooper, More Difference
  • Martin Webster and Tom Proverbs-Garbett, Pinsent Masons
  • Ornella Nsio, Recruitment & Employment Confederation
  • Anthony Horrigan, Spktral
  • Rosalyn Breedy, Laura Conway and Richard Isham, Wedlake Bell

Related Articles:
Latest Articles:
About the author:

Market Tracker is a unique service for corporate lawyers housed within Lexis®PSL Corporate. It features a powerful transaction data analysis tool for accessing, analysing and comparing the specific features of corporate transactions, with a comprehensive and searchable library of deal documentation across 14 different deal types. The Market Tracker product also includes news and analysis of key corporate deals and activity and in-depth analysis of recent trends in corporate transactions.