A RECENT study has highlighted that the number of Black, Asian and minority ethnic (BAME) top executives has decreased over the past year. This is a direct result of the UK’s biggest companies’ failure to improve the ethnic diversity within their boardrooms.
Recruitment consultancy Green Park have revealed that the total number of BAME board members, both executive and non-executive, fell to 7.4% this year, from nearly 9% in 2018. Furthermore, the number of chairs, chief executives and finance directors has stalled at 3.3%.
Green Park is chaired by former Equalities Commission leader Trevor Phillips. He spoke out about the findings and highlighted his dissatisfaction with the results; which showed the UK’s FTSE 100 companies have been failing to follow their successful US counterparts “by properly resourcing change”.
He said: “Our latest analysis shows that after five years of monitoring, the promise that things would change over time for ethnic minority leaders in the FTSE 100 looks just as empty as the corporate pipeline. Women are cracking the glass ceiling; but people of colour remain super-glued to the corporate floor.”
The chairman warned: “If companies want to sell across the globe, particularly the Far East, Africa and South America, if they have a leadership that doesn’t look like the modern world, then actually they’re not going to be able to compete with, for example, Chinese companies.”
47 companies still have no BAME people at board and executive director level stands at 14 fewer than in 2014.
In response to the findings, the report has advised firms to hire a chief diversity officer – as 50% of their US counterparts have done to help tackle this problem. Failure to do so could result in “commercial risk, regulatory attention and losing key talent to global competitors”.
The struggle for increased ethnic representation in the boardroom has been an ongoing battle. In 2018, the government carried out a similar exercise to monitor updates on the 2017 Parker review.
The Parker review set a four-year target for FTSE 100 to appoint at least one board-level director from a BAME background by 2021. An update on progress for 2019 was due this month, however, the report has been delayed due to the upcoming general election (Dec 12).
The 2017 report revealed managers were apprehensive about discussing race and ethnicity for fear of causing offence.
One respondent told The Guardian in 2017: “The lack of BAME people in my company makes me feel ashamed. It is inexplicable unless you accept there must be discrimination in our culture.”
The 2021 target for the FTSE 100 is voluntary, but companies that fail to abide by their requests will be asked for further explanation.