Nearly all the UK’s 100 largest listed companies now have at least one minority ethnic director on their boards, according to the latest update from the government-backed Parker review, which was set up to improve diversity in Britain’s boardrooms.
The voluntary survey of FTSE 100 companies showed that 96% of companies in the index had at least one director from an ethnic minority background on their board by the end of 2022.
Meanwhile, almost half (49) of these 96 businesses now have more than one minority ethnic director on their boards.
This marked progress from a year earlier, when only 89 firms met the target; however it demonstrates that a handful of Britain’s top firms are still failing to bring an end to all-white boardrooms.
Frasers Group, the owner of the House of Fraser department stores, was among the four FTSE 100 companies that did not meet the target by the end of 2022. Frasers, once known as Sports Direct, was previously run by Mike Ashley, who stepped down from the board last year but remains the company’s controlling shareholder.
Among the other companies which retain their all-white boards by the end of 2022 were the investment firm F&C Investment Trust and the student accommodation manager Unite Group. The domestic repair and emergency services business HomeServe also had not met the target in the survey, but was delisted at the start of this year after it was sold to a Canadian alternative investment group in a multibillion-pound takeover.
The Parker review target is voluntary, but companies that fail to participate are expected to explain why.
The review was established in 2017, launched amid several measures designed to end the lack of diversity in the upper echelons of corporate Britain. FTSE 100 companies were given four years to meet the target of one board member from an ethnic minority background, while the next tier of companies on the stock market, the FTSE 250, were given until 2024.
Sir John Parker, the then chairman of the mining company Anglo American, who conducted the review, said the low levels of director roles held by people from ethnic minority backgrounds were a “wake-up call for major companies”.
The review’s latest update showed FTSE 250 firms are making progress in bringing directors from ethnic minority backgrounds on to their boards, with two-thirds (67%) of those who responded meeting the target, representing 149 companies, up from 55% a year earlier.
The current chair of the Parker review committee, David Tyler, said the FTSE 100 target set in 2017 “has effectively now been reached.”
He added: “We have long argued that companies benefit from ensuring that succession planning and management development plans include the development of ethnic minority executives.”
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However, only seven people from ethnic minority backgrounds currently hold the role of chief executive of a FTSE 100 company, one more than a year earlier, showing there has been slower progress in boosting diversity in executive roles.
A further six ethnic minority executives sit as chair, and there are nine who serve as chief financial officer.
This means that about 10% of these top positions are held by people from ethnic minorities.
The Parker review has launched new targets, requiring FTSE 350 companies to set a percentage target for senior management positions occupied by ethnic minority executives by the end of 2027.
Tyler said the review committee believes “this will benefit the companies and it will help to provide equal opportunities for people from minority ethnic communities”.
By December 2027, 50 of the UK’s largest private companies have also been set the target of having at least one ethnic minority director on their main board, as well as being required to set the goal for the percentage of ethnic minority executives in their senior management teams.