Deloitte backs new CBI business diversity push
2 Oct 2020
Deloitte has given its backing to a new initiative launched by the CBI to increase racial and ethnic participation in British businesses at the highest levels, the first accountancy firm to signal its commitment
2 Oct 2020
The campaign is calling for businesses to set and publish clear targets for greater racial and ethnic diversity at the board, executive committee and the level below.
Companies are invited to become signatories to the Change the Race Ratio, which will launch officially at the end of this month.
Those who sign up agree to make four ‘commitments to change’.
Firstly, FTSE 100 companies should take action to ensure they have at least one racially and ethnically diverse board member by end 2021. FTSE 250 companies have until 2024 to achieve this.
Secondly, organisations must take action at executive committee and executive committee minus one levels to set clear and stretching targets and publish them within 12 months of making this commitment.
In addition, they should establish a separate target for black participation at both levels.
The third requirement is for businesses to be transparent, by publishing a clear action plan to achieve the targets and share progress in the annual report or on the company website.
They should also disclose ethnicity pay gaps by 2022, at the latest.
Finally, signatories are required to create an inclusive culture, by focusing on recruitment and talent development processes to drive a more diverse pipeline, improving their data collection and analysis, and fostering safe, open and transparent dialogue, with mentoring, support and sponsorship. They should also commit to working with a more diverse set of suppliers and partners, including minority owned businesses.
These commitments are in line with the recommendations of the Parker Review into ethnic diversity in UK boards, published in 2016.
However, the CBI points out little has changed since then, with an update at the beginning of 2020 revealing 37% of FTSE 100 companies and 69% of FTSE 250 companies surveyed do not have any ethnic minority representation on their boards.
It aims to accelerate progress with its initiative, whose founder business partners include Aviva, Brunswick, Deloitte, Linklaters, Microsoft and Russell Reynolds.
Lord Karan Bilimoria, CBI president, said: ‘The time has come for a concerted campaign on racial and ethnic participation in business leadership. Progress has been painfully slow. We want to do for racial and ethnic diversity what the 30% Club has done so successfully for gender equality.’
Richard Houston, senior partner and chief executive of Deloitte UK, said: ‘The energy of the Black Lives Matter movement has given a fresh sense of urgency around racial diversity in business. Change the Race Ratio aims to grasp this moment to create real and lasting change.’
In its annual report, published this week, Deloitte voluntarily reported on its ethnicity pay gap in FY20. This showed the total earnings ethnicity pay gap reducing by 3.4 percentage points to 40.1% compared with FY19.
This year saw the firm launch a dedicated Black Action Plan in response to the Black Lives Matter movement. This is based on five key commitments, such as developing people to succeed and thrive and evolving the firm’s culture and behaviour, which come with meaningful and measurable objectives. It was developed together with the firm’s newly formed Black Steering Group and the Ethnicity Council.
Accountancy Daily’s most recent BAME firm survey found that in 2020, there are only 17 black partners within the UK’s top eight accountancy firms, representing just 0.4% of the 4,266 partners within these firms.