FTSE 100 just falls short of Parker Review diversity target

The UK’s largest companies narrowly missed the benchmark set in the government’s 2015 executive diversity review of having at last one director from a minority ethnic background by December 2021.

Close up of conference room with glasses of water on the table with papers, armchairs and a large window.

Ruth Holmes

16 March 2022

In figures released today, 89 out of 100 companies achieved the ‘One before 2021’ target to improve the diversity of boards, with five more companies subsequently achieving the goal in early 2022. A further three companies are at an “advanced stage” of the recruitment process, leaving three with no minority ethnic diversity on its board.The data means the representation by people from minority ethnic backgrounds is up from almost half five years ago, and from 74 in 2020, and have been warmly welcomed by business leaders. Forty-nine per cent of appointees are women. FTSE 250 companies have been given until 2024 to appoint at least one minority ethnic director.

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Progressive leadership

Sir John Parker, Chair of the Parker Review Committee, which set the initial target, said: “Our December 2021 target of every FTSE 100 Company having at least one Board director from a minority ethnic background has very nearly been met.“FTSE 250 companies also continue to make good progress; with three years to go on their target, over half have people from minority ethnic communities in their boardrooms.“The progressive leadership in FTSE Boardrooms deserves our congratulations and fulsome praise for their positive response to a range of initiatives over the past decade including this Review.“Their success places UK listed companies at the forefront of global governance, gender and ethnic diversity. This will be a winning combination in a competitive world with fast-changing demographics.”Paying tribute to Sir John Parker, who is stepping down from his role, David Tyler, Co-Chair of the Parker Review Committee, added: “These numbers compare starkly and very favourably with the position in 2017 when only 51% of FTSE 100 companies had people from minority ethnic communities in their boardrooms.“However, companies should not think of the Parker Review targets as ‘one and done’. We hope companies will follow the most diverse of their peer group and expand the scale and depth of initiatives fostering inclusion and diversity right through organisations to help develop the next generation of talent.“We are very grateful to Sir John for his inspired and purposeful leadership of the Review since it was initiated in 2015.”

‘Succeeding on merit, not background’

Acknowledging that the achievements are just the start, the Rt Hon Kwasi Kwarteng MP, Secretary of State for Business, Energy & Industrial Strategy, said: “We want to foster a business environment in the UK where people have equal opportunity to succeed and progress in their career through merit and ability, rather than their ethnic background.“While there is still more to do, today’s findings demonstrate the great strides being made – particularly at FTSE 100 level – to increase ethnic diversity on boards, as more of Britain’s biggest companies recognise the business case for diversifying their teams so that they better reflect the society we live in.”Lord Karan Bilimoria, CBI President and Chair of Change the Race Ratio, also reflected on the positive steps of the past few years: “FTSE 100 firms have stepped up when it comes to ethnic diversity at the top. Now it’s time for those last few companies to follow suit and end the all-white boardroom.“UK plc has reached an important way point, and it’s time to step up the pace of progress. The FTSE 250 must show the same effort and focus to improve ethnic diversity at senior levels.“The Parker Review has created a groundswell of action which has led to real results in the boardroom. Government needs to match business progress by bringing in mandatory ethnicity pay gap reporting in the same way they have done for gender.“Our Change the Race Ratio campaign exists to help businesses to improve, not only to measure their progress. I encourage all companies to sign up.”

One by 2021 – what the figures mean

Most people of colour recruited to FTSE 100 board roles occupy non-executive directorships. Only six CEOs and 12 other executive directors across the FTSE 100 come from a minority ethnic group, says the latest report. “We recommend that continued attention is focused on this issue and believe that this — together with the growing experience of many recently appointed minority ethnic NEDs — will help generate a growth in the number of directors from minority ethnic groups in the most influential roles around the Boardroom table. This is what has happened with women directors in recent years and we anticipate a similar trend with minority ethnic directors.”Commenting on the figures, Laura Sanderson, UK Country Manager and lead of the Board & CEO Advisory Practice in Europe for leadership search and advisory company, Russell Reynolds Associates, says that despite progress, the UK is still not where it needs to be and the focus needs to be on creating truly inclusive boardrooms."The UK is still paying for the failure to provide opportunities to the last generation of talent. Discrimination, both overt and unconscious, has prevented many high performing people of colour from getting the experience they need to compete for boardroom roles. “We have started to patch up the leaky pipeline of talent in the UK but unless businesses consistently provide the right experience to junior colleagues of colour, we will never achieve truly representative boardrooms. “Too often businesses treat ethnic diversity as just one more checkbox in a never ending list of requirements. This approach doesn't work. Diversifying the boardroom means meeting talent on their terms and creating a role which fits their strengths. We must be creative and find a way to say yes." "Many of the men and women of colour who have earned their places in UK boardrooms since the Parker Review began have learned to mask their cultural or class differences in order to compete. It should not have to be this way. The boardroom must be an environment where every member feels able to embrace their difference if they want to.”