Parker Review | Ethnic diversity on Boards is improving, but not fast enough

Ethnic diversity on Boards is improving, but not fast enough

Recent analysis of company directors, chief executives and senior management in the UK's biggest companies has revealed progress in ethnic diversity on Boards, but at a relatively slow pace.

The review, conducted jointly by the Parker Review Committee and the Department of Business and Trade, focused on the 350 most valuable companies on the London Stock Exchange, along with data from 36 of the 50 largest UK companies not listed on the stock exchange.

Key findings indicate that while there has been a notable increase in the number of CEOs from ethnic minority backgrounds in the FTSE 100, rising from seven in 2022 to 12 in 2023, there remains a significant gap in achieving adequate representation.

Additionally, the number of chairs from ethnic minority backgrounds has seen a modest increase, but the overall number of chair and executive director positions held by people from ethnic minority backgrounds remains stagnant.

Although progress is clear, particularly with 96 out of the top 100 FTSE companies having at least one director from an ethnic minority background, the pace of change is sluggish.

The report highlights the necessity for more significant efforts to meet the targets set for ethnic diversity, especially as FTSE 250 firms strive to have at least one director from an ethnic minority background on their Board by December.

Encouragingly, the review notes that the majority of companies in the FTSE 250 index have met the target of appointing at least one ethnic minority director, showing an improvement from previous years.

However, there is still ground to cover, as only 28 FTSE 250 companies have two or more minority ethnic directors.

The review has now extended its targets beyond Board level and listed companies, aiming to include the largest 50 private companies, as well.

Private companies are now tasked with providing data on their ethnic diversity, with a target set for at least one ethnic minority director on their main board by 2027.

Additionally, emphasis is placed on achieving ethnic diversity at the senior management level, allowing companies to set their own targets by December 2027.

While strides have been made in enhancing ethnic diversity on Boards, the report signals that more concerted efforts are needed to accelerate progress and ensure equitable representation across all levels of leadership in the UK's corporate landscape.

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