Majority of FTSE 100 meet minority ethnic board target

Peninsula Team

March 16 2023

Nearly all of the FTSE 100 have at least one minority ethnic director on their boards, but four companies still have all-white boardrooms

The Parker Review, which was set up to improve diversity in the UK’s boardrooms, found that 96 the of the FTSE 100 had at least one director from an ethnic minority background on their board by the end of 2022 – up from 89 last year.

Meanwhile, almost half (49) of these 96 businesses now have two or more minority ethnic directors on their boards.

Of the four companies which have not met the target, one company has been acquired since December and is no longer part of the FTSE 100.

Frasers Group, the owner of the House of Fraser, was among the four FTSE 100 companies that did not meet the target by the end of 2022.

Among the other companies that failed to hit the target were the investment firm F&C Investment Trust and Unite Group, the student accommodation manager. The domestic repair and emergency services business HomeServe also failed to meet the target.

Around 18% of all FTSE 100 director roles are held by directors from a minority ethnic group – 190 of a total of 1,064 positions.

However, the most senior positions on boards are still dominated by white executives. Only seven minority ethnic board members were CEOs, nine were chief financial officer (CFO) and nine were executive directors – meaning that people from ethnic minorities now hold around 10% of the most influential board positions.

Going forward, the top 50 privately held companies will also have to meet diversity targets within the next two years.

David Tyler, chair of the Parker Review Committee, said: ‘Continuing progress is being made by FTSE 350 companies to bring ethnic minority directors onto their boards. The target we set in 2017, to have at least one ethnic minority director in every FTSE 100 boardroom, has effectively now been reached.

‘We have long argued that companies benefit from ensuring that succession planning and management development plans include the development of ethnic minority executives. That’s why we are now asking each FTSE 350 company to set its five-year target, for December 2027, for the percentage of senior management positions that will be occupied by ethnic minority executives.

‘We believe this will benefit the companies and it will help to provide equal opportunities for people from minority ethnic communities. In addition, we recognise the growing importance of private companies to the UK economy and society. We are asking 50 of the UK’s largest private companies to set a target of appointing at least one ethnic director on its main board by December 2027.’

However, progress in the FTSE 250 was much slower with 149 companies reporting at least one director from a minority ethnic background. This represented 67% of companies that responded to the survey and is equivalent to 60% of all FTSE 250 constituents.

There are only two years left to reach the 2024 target for all companies to have at least one minority ethnic director.

Directors from a minority ethnic group hold 11% of all director positions within the FTSE 250 companies that responded – 188 of 1,749 positions.

In the FTSE 250, five chair, 14 CEOs, 10 CFOs and five other executive directors came from a minority ethnic background.

Nusrat Ghani MP, business and trade minister, said: ‘With more and more boardrooms voluntarily hitting their ethnicity targets this year, it’s clear that UK companies are on the right course for achieving true diversity in business.’

'There’s still more to do however, and the Parker Review’s recommendations set out how companies must improve diversity from top to bottom in the coming years, so they can make the most of untapped talent available and ensure British boardrooms and senior management teams are truly reflective of British society.’

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