FTSE 100 firms miss boardroom diversity targets but there is 'significant progress'

Suban Abdulla
·4-min read
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Sir John Parker, chairman of the Parker Review Committee, said the survey “represents significant progress towards the target” of having at least one director from an ethnic minority by December 2021. Photo: Getty

Some of the UK's biggest companies in the FTSE 100 (^FTSE) have yet to appoint a single member of any ethnic background to their boards, a new report says.

The latest Parker Review shows that out of 100 of Britain's best-known firms, 16 companies, including the London Stock Exchange Group (LDNXF), International Consolidated Airlines Group (IAG.L) and BAE Systems (BA.L) have all-white boards.

Three companies, Next (NXT.L), Just Eat Takeaway (JET.L) and Ashtead (AHT.L) declined to respond to requests for information on their board representations.

It showed that 81 out of 100 firms had ethnic representation at board-level. This was up from 74 in November 2020 and 52 in January last year.

Sir John Parker, chairman of the Parker Review Committee, said the survey “represents significant progress towards the target” of having at least one director from an ethnic minority by December 2021.

The report, which was set up by the government in 2015, is based on voluntary submissions from companies. The aim of the review is to ensure that every FTSE 100 company has at least one ethnic board member by the end of 2021 "Beyond One by 21" and every FTSE 250 (^FTMC) company by the end of 2024.

Ethnic minorities are defined as people who "identify as or have evident heritage from African, Asian, Middle Eastern, Central and South American regions."

It found that of the 998 positions on the boards of firms that responded, 124 (12%) were held by people from ethnic minorities — up from 95 in 2020.

As of March 2021, 118 directors in FTSE 100 companies are from an ethnic minority, this is up from 92 last year. Of these, 54%were women — up from 42% in 2020 — and 36% identified as British citizens.

Five directors from ethnic minorities were also on more than one FTSE 100 board and eight who also sat on FTSE 250 boards.

But, the report highlights that progress remained slower when looking at key areas. Only five ethnic minority directors occupied a CEO position, compared to six last year, all of whom are men.

READ MORE: Women still underrepresented in senior roles in financial institutions

Meanwhile, seven FTSE 100 firms hired ethnic main board directors in the past few months, including Aviva (AV.L), Taylor Wimpey (TW.L) and Whitbread (WTB.L). Companies that have yet to hire ethnic minority directors include AutoTrader (AUTO.L), JD Sports (JD.L) and Persimmon (PSN.L).

"Corporate Britain, in my view, is becoming more comfortable with boardroom diversity. I believe too that the majority of FTSE board leaders want British companies to be seen not only as the best governed in the world, but also comprising society's best diverse talents," Parker said.

"We would hope the remaining companies in the FTSE 100, who still have time to meet the target, will ensure they follow this encouraging lead and align with the business case that underpins the review."

Parker said that it could take some time before those targets are met as board vacancies don't come up often.

Business secretary Kwasi Kwarteng said that progress was "very promising, particularly given the difficult circumstances businesses have been facing."

Diversity, inclusion, gender balance and equal pay issues in the workplace have been propelled into the spotlight in recent years.

A separate study by Equileap's Gender Equality Report & Ranking 2020 showed that women are still underrepresented in senior positions at financial institutions, despite being well-represented in the finance industry.

It indicated women represent 50% of the workforce in global financial companies, but on average 26% of women are represented on the board of directors, 18% on the executive team and 28% in senior management.

Out of the 3,702 global companies researched for the report, only 10 companies achieved gender balance (40-60% women) at all four levels last year. They were: AIB Group (AIBG.L), Air New Zealand (AIR.NZ), Assura (AGR.L), Coty (COTY), DNB, Gecina (GFC.PA), Mercialys (MERY.PA), Hang Seng Bank (0011.HK), Klovern (KLOV-B.ST), and Wallenstam (WALL-B.ST).

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