Nearly all FTSE 100 boards have met ethnic diversity target, review says

But experts urge employees not to stop at ‘one and done’ when making their leadership more diverse

Nearly all of the UK’s top listed firms now have at least one board member from an ethnic minority background, meeting one of the key targets of a government-backed review into boardroom diversity.

The latest report from the Parker Review Committee found that by December 2021 – the target date set by the review – 89 companies on the FTSE 100 had ethnic diversity on their boards by December 2021, up from 74 in November 2020.

By March 2022, another five FTSE 100 firms had added a director from an ethnic minority background, while three more are said to be in the advanced stages of recruiting an ethnic minority director.

The review also found that the FTSE 250 was on track to meet its target of all firms having at least one ethnic minority director by 2024, with more than half (128) having already achieved this by December 2021.

Sir John Parker, chair of the Parker Review Committee, said last year saw an “extraordinary sea change within listed companies regarding diversity and inclusion”.

“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,” he said, adding that UK listed companies were now “at the forefront of global governance, gender and ethnic diversity.”

Get more HR and employment law news like this delivered straight to your inbox every day – sign up to People Management’s PM Daily newsletter

“This will be a winning combination in a competitive world with fast-changing demographics,” said Parker.

Launched in 2017, the initial Parker Review into diversity on boards made a series of recommendations, including a ‘one by 2021’ target which stipulates all FTSE 100 boards have at least one director from an ethnic minority background by the end of 2021, and a similarly named ‘one by 2024’ target for the FTSE 250.

For this latest update, all FTSE 100 firms and 233 of the FTSE 250 firms responded to the review’s voluntary census on boardroom diversity: a “significant improvement” on other years, it noted.

The review also noted that the majority of board seats held by people from ethnic minority backgrounds were non-executive director roles, with progress in executive roles happening at a “relatively slow pace”.

Just six CEOs and three chairs across the FTSE 100 came from an ethnic minority background, with the same true of just 16 CEOs and five chairs across the FTSE 250.

David Tyler, co-chair of the Parker Review Committee, urged employers to continue working on improving diversity in the boardroom.

“These numbers compare starkly and very favourably with the position in 2017 when only 51 per cent of FTSE 100 companies had people from minority ethnic communities in their boardrooms,” he said.

But, Tyler added: “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.”