The leadership of the UK’s top listed firms will not be representative of the UK’s ethnic diversity for another 216 years at the current rate of change, a report has warned.
A survey of FTSE 100 firms, conducted by Green Park, found that collectively just 11 ‘top tier’ leadership roles – CEO, CFO and chair – were filled with individuals from an ethnic minority background.
This is only one more top tier ethnic minority leader than in 2014, the report said.
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According to the Office for National Statistics (ONS), around 13 per cent of the of the UK’s working-age population is non-white, meaning that at the current rate of change of one additional ethnic minority leader every eight years, it would take until the year 2237 for the top tier leadership of FTSE 100 companies to be representative.
Of the three positions, CFOs were found to be the most ethnically diverse, with 7.2 per cent of roles filled by people from ethnic minority backgrounds. However, CEO ethnic minority representation had halved between 2019 to 2021, from 4 down to 2 per cent.
For the first time since 2014, there was not a single black chair, CEO or CFO in any FTSE 100 company.
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The report also criticised inclusion and diversity departments in FTSE 100 firms as being one of the least diverse parts of the corporate world. Less than a third (29.2 per cent) of I&D-focused roles were held by ethnic minority leaders, including 22.9 per cent held by ethnic minority women and just 6.3 per cent by ethnic minority men.
More than four in five (85.4 per cent) I&D leaders were women, and nearly two in three (62.5 per cent) I&D leadership roles were filled by a white woman.
Additionally, just three of the I&D leaders surveyed sat at the board and executive committee level, which the report suggested was an indication that the function was not considered by most FTSE 100 organisations as a pathway to the c-suite.
The report also looked at the breakdown of gender diversity in FTSE 100 organisations, finding that female board members were almost twice as likely to be non-executive directors than executive directors.
Nearly half (47.8 per cent) of non executive directors were female, while executive director roles lagged behind with just over a quarter (27.7 per cent) filled by women.
More broadly, the report found the functions more likely to lead to c-suite positions were found to be overwhelmingly dominated by men. These included commercial and procurement, which was 82.8 per cent male; finance, which was 83.5 per cent male; and digital, data and technology, which was 78.8 per cent male.
Dr Scarlett Brown, corporate governance lead at the CIPD, said employers needed to give more consideration as to why certain sectors were viewed as more likely to lead to a c-suite position, and that boards and recruiters needed to think more broadly about the kinds of experience that are valuable – including leaders with experience in the people profession, public sector and sustainability.
“The pandemic has, more than ever, shown that people decisions are board-level decisions. Having a diverse group in terms of background and experience is vital for effective decision making,” said Brown.
Charlotte Woodworth, gender equality campaigns director at Business in the Community, said the low number of women reporting to boards or executive committees was disappointing and urged firms to ensure they are recognising and promoting a diverse mix of people up to senior levels.
“It is shameful to see that in 2021, the FTSE 100’s most senior executives – chairs, CEOs and CFOs – are almost 90 per cent male,” she said, adding that this was not in keeping with modern values and attitudes. “Firms will be paying a heavy price in terms of missing out on the talent and experiences that women – just over half the population – have to offer.”
However, among the myriad issues, the report also indicated some positive signs for diversity among FTSE 100 organisations.
Ethnic minority representation has now reached 13.1 per cent in the non-executive area, representative of the working age population, while female representation in the top 20 roles (including board members and executive committees) rose to around a third (33.2 per cent) in 2020, from 12.3 per cent in 2014.
There were also 36 women in top three roles in the FTSE 100 (equivalent to 12.2 per cent), an increase of 23 roles since Green Park’s first analysis in 2014 where the women made up 4.3 per cent of these roles.
The role of CFO saw the highest female representation, with women filling 16.5 per cent of positions, while CEOs had the least female representation at just 8.2 per cent.