BUSINESSNEWS
The ethnic diversity of UK boards
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BUSINESS MINISTER MARGOT James spoke in November at the launch of Sir John Parker ’ s independent report on diversity . She said : “ Make no mistake : this work matters . Diversity matters . You ’ ve heard it before but it ’ s true . People from different backgrounds bring different experiences and perspectives , and it ’ s long been recognised that greater diversity in the boardroom can help create constructive and challenging dialogue .
Having this diversity around the table helps ensure the board will fulfil its duties to the full , and take well-grounded decisions . And these perspectives are good for leadership too . We can all think of times when organisations have been crying out for change , but existing practices or assumptions have remained unchallenged . Diversity is a great counter to this .
‘ People from different backgrounds bring different experiences and perspectives ’
And it ’ s important for trust . Trust in the board by their workforce . Trust by employees who want to believe that if they work hard they too can make it to the top . That they work in an inclusive environment which embraces difference . Where difference is recognised as an asset to the company and not treated as a barrier to progress . And then there is trust in business by society . But recent years have seen that trust challenged .
Businesses of all sizes need to take positive steps to ensure they are not seen as out of touch , to demonstrate that they are operating for the benefit of the many , not the privileged few . So we must ensure that business leaders are more representative of the people that work for them , and of the customers and communities they serve . But while there has been an improved focus on gender diversity in recent years , the attention given to ethnic diversity has been minimal . So I am very pleased that Sir John has produced this report .
But one could not call its findings ‘ pleasing ’. It contains a startling fact : while 14 % of the population identifying as black and minority ethnic , only 1.5 % of directors in FTSE100 boardrooms are UK citizens from a minority background . More than half of the FTSE 100 Boards are exclusively white . This does not reflect the society we live in . Nor does it reflect the international markets in which FTSE companies operate .
We are missing voices and perspectives . So many people are being denied opportunities that should be available to them . It is not right that boardrooms in 2016 can still be predominantly male and exclusively white . People of colour are in general more likely to go on to higher education compared to their white peers . Yet this research shows they are less likely to be in leadership positions in business . Whether due to failures in recruitment , or lack of internal opportunities or outright discrimination , the result is the same . Business and society at large are losing out on talent . This isn ’ t necessarily because of discrimination . But it is about culture change , about breaking bad habits .
Businesses need to recruit the best person for the job if they are going to compete in today ’ s economy , and people from all backgrounds should be given the equal opportunities to contribute . Because in business , as in politics , we are selling ourselves short if we don ’ t seek out people from different backgrounds . Sir John ’ s report sets out the commercial case for this very well , covering improvements to leadership , brand , culture , talent and the supply chain .
That ’ s why I fully endorse Sir John ’ s areas of recommendation . Not just that there should be a target to focus companies ’ attention , and that companies can do much more to identify and sponsor people with potential , but that there should be stronger codes of conduct for search firms . We need everyone involved in recruitment and talent management to step up a gear .
Our success in improving gender diversity shows how embedded cultures can change when business addresses the challenge . I am optimistic that with we will see real progress in improving ethnic diversity on boards over the next few years .
The CBI reacted to the Parker Review Committee ’ s recommendations , with CBI Deputy Director-General , Josh Hardie , saying : “ The Parker Review ’ s recommendations are an ambitious but also practical basis on which to make progress on an important issue .
‘ Businesses need to recruit the best person for the job if they are going to compete in today ’ s economy ’
“ Companies must do more to secure their future talent and help capable employees from all backgrounds progress to senior management positions . Ultimately , attracting and promoting talent from all backgrounds helps us to build inclusive and productive workplaces , in which everyone feels engaged and able to perform at their best .”
CLEARVIEW-UK . COM » DEC 2016 » 91