John Parker, author of an influential report into ethnic and cultural diversity and chairman of utility company Pennon, has called on British business to step up their efforts on ethnic minority board representation after painfully slow progress in recent years.
“I’ve been a supporter of diversity in boardrooms for a very long time,” said Sir John, a former chairman of five FTSE 100 companies including Anglo American. “Don’t tell me that the talent is not there, you just have to look at our new Chancellor, and there are many more people in the ethnically diverse communities in the UK and overseas.”
The Parker Review found 50 per cent of FTSE 100 boards had no representation from black, Asian and minority ethnic (Bame) groups in 2017. The report made a series of recommendations, including a target for all FTSE 100 boards to have at least one director from an ethnic minority background by 2021.
An updated report in February found 37 per cent of FTSE 100 companies, based on responses from 31 out of 83 companies surveyed, do not have any ethnic minority representation in their boardrooms. However, the rate of improvement has been slower than hoped.
Sir John said the coronavirus pandemic provided financial services with an opportunity to consider the kind of sector it wants to be when it emerges from isolation.
“When we’re all holed up in our homes, we’re going to have more time to think, more time to reflect,” he said. “I want to see a just society where — regardless of colour — people can actually develop their talents and deploy them in the interests of their country.”
Sir John’s comments come as the Diversity Project and #talkaboutblack, two industry bodies championing inclusivity in asset management, launch a fresh initiative that aims to increase diversity across FTSE boardrooms.
“We intend to invite representatives and CEOs from large listed companies, and help them establish some type of sponsorship programme for that talent,” said Gavin Lewis, steering group member at the Diversity Project.
The two groups said they were frustrated by the lack of progress since the first Parker Review in 2017 and have developed a cross-sector sponsorship mentoring programme focused on developing a pool of high potential, ethnic minority leaders and senior managers.
The 2020 study found that FTSE 250 boards were less diverse than the FTSE 100. The report found 69 per cent of the FTSE 250 companies analysed, or 119 out of 173 companies surveyed, had no ethnic diversity on their boards.
In the FTSE 350 cohort, 59 per cent, or 150 out of 256 companies surveyed, had no minority ethnic representation in the boardroom.
Justin Onuekwusi, a founder of #talkaboutblack, said ethnic diversity was an important part of the lack of diversity in financial services. “It started with gender, and now there is greater concern over ethnicity. When more ethnic minorities get into leadership positions, more people from diverse backgrounds will be encouraged to join your organisation.”