The UK’s largest private companies have been told to have at least one ethnic minority director on their boards as well as representation within the senior management team by a state-backed industry review.
The annual Parker review on Monday said that 96 companies in the FTSE 100 now have at least one minority ethnic director — up from 89 this time last year — but only two-thirds of FTSE 250 companies that submitted data had met the target.
The Parker review was commissioned by the government in 2015 to address the lack of ethnic diversity on UK boards. It asked companies to report their data and set a voluntary target for all FTSE 100 boards to have at least one director from a minority ethnic background by December 2021. It called on all FTSE 250 boards to do so by the end of 2024.
This year, the review has set new targets recommending that each FTSE 350 company set a percentage target for senior management positions to be occupied by ethnic minority executives for December 2027.
It is the first time that the UK’s largest 50 private companies — including 2 Sisters Food Group, Bet365, Ineos and John Lewis — have been asked to follow the recommendations, as the review seeks to tackle racial inequalities at the top of some of Britain’s biggest employers.
The review said that all businesses needed “to ensure that diverse talent, including those from a minority ethnic background, are given equal opportunities to contribute”.
It said that given the wide variation in the proportion of ethnic minorities in different regions of the UK, there was no “one size fits all” target for executives in senior management. Instead, the review asked each company to set its own goal for December 2027.
David Tyler, chair of the review, said this year’s results marked a “way station, not the end” of efforts to ensure ethnic representation across company managements.
Tyler said 17 per cent of the UK population was from a minority ethnic background, according to the last consensus. “If companies are not working hard to get the best out of this 17 per cent then they are fighting with one arm tied behind the back,” he added.
Of the 96 FTSE 100 companies that have met the target, 49 have more than one minority ethnic director on their board. Women comprise about half the minority ethnic directors.
Of the four companies that did not meet the target, one has been sold since December and is no longer part of the FTSE 100. The other three are Mike Ashley’s Frasers Group, F&C Investment Trust and Unite Group.
About a fifth of all FTSE 100 director positions — 190 out of a total of 1,064 — were held by people from a minority ethnic group, including 31 chair and executive director positions. Seven were chief executives and nine served as chief financial officers.
People from a minority ethnic group held just over a tenth of all director positions within the FTSE 250 companies that responded to the survey.