Lead the argument to improve diversity on UK Boards

In the Parker Review's first report, published in 2017, it set a target for all FTSE 100 companies to have at least one director from an ethnic minority background by 2021. However, the 2020 Parker Report reveals there has been 'slow progress'.

The report, which includes FTSE250 data for the first time, finds that FTSE 250 boards are even less diverse than the FTSE 100.

 

FTSE 350 Ethnic Minority Representation 2020:

% Boards with no ethnic minority representation:
37% FTSE 100
69% FTSE 250
59% FTSE 350
No. of ethnic minority directors
98
FTSE 100
868 directors disclosed their ethnicity
80
FTSE 250
1,503 directors disclosed their ethnicity

Only 11 FTSE 100 companies have added an ethnic minority director to the board since 2017.

Across the FTSE 350, 59% have no ethnic representation on their company board (150 out of 256 companies analysed).

 

FTSE 350 Ethnic Minority Leadership Representation 2020:

No. of ethnic minority directors that hold position of Chair/CEO:
6
FTSE 100
9
FTSE 250
15
FTSE 350

 

FTSE 350 Ethnic Minority Female Representation 2020:

%. of ethnic minority directors that are female:
41% FTSE 100
45% FTSE 250
43% FTSE 350

 

FTSE 350 Ethnic Minority Reporting

The 2020 Parker Review included research carried out by Cranfield University's School of Management on behalf of the Financial Reporting Council (FRC). It revealed:

  • 52% of FTSE 250 companies failed to mention ethnicity in their board diversity policy

  • only 14% of FTSE 100 companies set measurable objectives for board ethnic diversity

  • a mere 2% of FTSE 250 companies set measurable objectives for board ethnic diversity

  • most of the FTSE 350 do not set measurable ethnicity targets and, even where objectives have been set, no FTSE 350 companies report progress against them

  • whilst 11% of FTSE 100 and 4% of FTSE 250 companies plan to increase ethnic diversity in the succession pipeline, most focus on general progression rather than specifically focusing on senior management

Conclusion

To help accelerate the rate of progress, the 2020 Parker Review builds on its 2017 recommendations with a number of additional actions. These new recommendations include:

  • improved reporting of ethnicity on boards
  • measuring board level diversity
  • helping to build a pipeline of high potential diverse leaders and senior managers.

The Financial Reporting Council (FRC) has also stated that it expects improved reporting from companies under the new UK Corporate Governance Code. This code promotes diversity in appointments and succession plans, including ethnic diversity.

Source: New Parker Review Report on ethnic diversity on UK boards

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