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FTSE 100 boards fail to improve BAME representation

By Gavin Hinks

BAME representation, boardroom diversity

Fresh research concludes that FTSE 100 companies have failed to improve black, Asian and ethnic minority (BAME) representation at the highest level. Indeed, despite much discussion of the issue, the position has only worsened.

Trevor Phillips, the founding chair of the Equality and Human Rights Commission and currently chair of leadership consultancy Green Park, authors of the latest report, did not hide his frustration with the results.

“Our latest analysis shows that after five years of monitoring, the promise that things would change over time for ethnic minority leaders in the FTSE 100 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 USA to get a break.”

Strong words, but the figures bear him out. They show that the proportion of BAME chairs, chief executives and chief financial officers in the UK’s biggest 100 listed companies stands at 3.3%, or 10 individuals, approximately no improvement over a six-year period.

Looking at boards and executive committees as a whole, BAME representation has fallen to 7.4% from 9% last year. The 2014 figure was only slightly lower at 6.2%.

Looking at the leadership pipeline, Green Park finds the year-on-year improvement is flat: 10.6% last year compared with 10.7% in 2019.

The results are contained in Green Park’s annual leadership report which looks at gender and ethnocultural diversity in the FTSE100.

As Phillips notes, the report finds that gender diversity has made strides while BAME representative has frozen. Female leaders in boardrooms now stands at 28.8%. But Green Park notes these are mostly white women. BAME female representation at this level has dropped from 3.1% to 2.8%.

In all, 47 companies in the FTSE 100 have no ethnic minority representation at board and executive level. In 2014 the figure was 61.

Gender or ethnicity?

Raj Tulsiani, chief executive of Green Park, notes that some companies must be struggling to manage improvement in both gender and ethnicity.

“The increasingly patchy progress in many sectors may be a sign that some companies find it hard to focus on diversity in the true sense of the word, opting for concerted effort in the areas of gender or race but struggling to consistently address both,” says Tulsiani.

“If British business is serious about presenting a modern face to the world it needs to properly invest in diversity and inclusivity leadership, and give those leaders the resources to match.”

Aside from the obvious concern that companies are missing out the talents of a significant part of UK society, the top 100 firms are also in danger of missing a key target. In 2017 a review by Sir John Parker recommended that FTSE 100 companies have at least one BAME member by 2021. Green Park estimates that at the current it could take until 2039.

One improvement they indicates firms could make is the appointment of chief diversity officers, a measure taken by many US businesses. Indeed, almost half of S&P companies have one, two-thirds in place for at least three years. Notable examples include General Motors, Walt Disney and Time Warner.

Green Park points to there being “very few” UK equivalents. Those that do exist, such as BP, have much of their operations outside the UK.

With a little over a year to go until Sir John’s deadline companies might want to bear in mind one of his recommendations. He asked that companies set out their policies on diversity and should they miss the target, publish an explanation why.

Without improvement the public may be about to read some fairly embarrassing reasons why BAME representation has proved so difficult.

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