'Serious concern' over lack of diversity in boardrooms at leading firms

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A lack of diversity at the top of Britain's largest listed firms could scupper Government plans to increase trade with non-EU partners after Brexit, the boss of a leading executive advisory firm has warned.

Fresh data from Green Park shows that 58% of FTSE 100 boardrooms still have no ethnic minority representation, and while that marks an improvement on the 62 companies that recorded all-white boards last year, chief executive Raj Tulsiani said it could put the UK at a disadvantage.

"In light of the UK's decision to leave the European Union, and our desire to increase trade with non-EU countries, the ongoing inability of our leading companies to attract and retain leaders from East Asian and African backgrounds should be a matter for serious concern.

"The UK's aspiration to be outward-looking and open to business with the non-European world is hardly enhanced by the continued lack of challenge in the boards of our leading companies, still statistically and behaviourally dominated by men of similar cultural and educational backgrounds," he told Press Association.

His comments echo concerns laid out in the Government-backed Parker Review, which found "disproportionately" low levels of diversity across UK boardrooms.

The review, which was released in November last year, subsequently recommended that one director of colour be appointed to each FTSE 100 company by 2021, and to each FTSE 250 board by 2024, adding that HR teams and headhunters should be required to find qualified people of colour whenever an executive position needs to be filled.

The Green Park report said the slow adoption of the recommendations "calls into question" whether the Parker Review targets will be met, especially as the number of ethnic minorities holding chairman, chief executive and chief financial officer positions at Britain's largest listed firms dropped 18% compared with a year earlier. 

It also highlighted that no female ethnic minorities serving as chief executives or chief financial officers within the FTSE 100, with women only holding 6% of the top 300 boardroom jobs.

Similar recommendations on gender-based recruitment were made by the Davies review in 2015, saying that women should make up a third of every FTSE 100 boardroom by 2020.

But a white woman is currently twice as likely to reach a top three position at a FTSE 100 firm as a ethnic minority male, and 20 time more likely than a minority female.

There may be some hope, however, as Green Park's study found a uptick of ethnic minorities in the so-called "leadership pipeline" to 5%, marking the highest level of diversity among employees with the potential to serve among the highest tier of management among FTSE 100 firms in four years.

Mr Tulsiani said: "These are not the times for group-think and monocultural boards.

"In a world where access to top talent from abroad may be increasingly limited, it is poor governance for major enterprises to continue to ignore local talent from currently underrepresented groups, especially ethnic minorities and women, in their leadership succession planning.

"This is particularly true given businesses aspiration to become more trusted and relevant in a post Brexit Britain."