FTSE 100 failing at boardroom ethnic diversity
5 Dec 2019
The UK’s top companies are failing to improve ethnic diversity at their leadership levels, with the total number of black, Asian and minority ethnic (BAME) FTSE 100 board members dropping over the past year, according to research from Green Park
5 Dec 2019
The London-based executive recruitment and diversity consultancy produces an annual analysis of gender and ethnocultural diversity at three key leadership levels: the top three level includes chair, CEO and CFO roles, while the top 20 level consists of board and executive committee. The top 100 level represents the leadership pipeline.
This year’s report shows progress on ethnic diversity is stalling at almost every seniority level.
At 3.3%, the number of BAME chairs, CEOs and CFOs (10 individuals) has not improved over the six years monitored.
At the top 20 level, the proportion of BAME directors and non-executive directors in the FTSE 100 has dropped over the past year to 7.4%, down from nearly 9% in 2018, with only a marginal increase from 6.2% in 2014.
Meanwhile, BAME representation at top 100 level is flat year-on-year, at 10.7% in 2019 compared to 10.6% in 2018, raising significant concerns about the prospects for any future improvement at board and executive committee level.
Green Park says 47 companies still have no ethnic minority membership at board and executive director level – just 14 less than in 2014.
At this rate of change it will take until 2039 before all FTSE 100 boards and executive committees have ethnic minority representation, and points out that this is a long way from achieving the government backed target set out by Sir John Parker to have no all-white boards by 2021.
On a positive note, the report reveals that progress on gender diversity is continuing, with a record number of female leaders at board and executive director level (28.8%). However, these increases are mainly in white rather than ethnic minority women, whose representation at this level has dropped over the past year from 3.1% to 2.8%, while white females have increased from 23.2% to 26%.
Green Park is urging FTSE 100 companies to follow their US counterparts by properly resourcing change - or face commercial risk, regulatory attention and losing key talent to global competitors.
This includes action to appoint a chief diversity officer. The consultancy points to the US where almost half (47%) of S&P Index companies have created such a position, with two thirds of these roles filled within the last three years at businesses such as General Motors, Walt Disney, Time Warner, Mastercard, Bank of America, Coca Cola and Walmart.
Trevor Phillips, chair of Green Park and founding chair of the Equality and Human Rights Commission said: ‘Our latest analysis shows that after five years of monitoring, the promise that things would change over time for ethnic minority leaders in the FTSE100 looks just as empty as the corporate pipeline. Women are cracking the glass ceiling; but people of colour remain super-glued to the corporate floor.
‘If the UK’s companies continue to ignore the experience and actions of their US competitors, they risk falling behind. With this attitude, post Brexit, we can expect talented female and minority executives - just like many of our minority actors - to exit to the US to get a break.’