Progress on increasing ethnic diversity in company boardrooms stalled last year, according to new research.
The number of new directors from self-declared ethnic minority backgrounds dropped for the first time since records began in 2019, according to analysis by Spencer Stuart headhunters of the UK’s biggest 150 publicly listed firms.
Experts cautioned that the lack of progress could be linked to a “one and done” attitude after Government-backed targets were introduced.
A review by Sir John Parker into the issue led to a target that all FTSE 100 companies should have at least one director from an ethnic minority background by December 2021.
It is disappointing to see a further slowdown in progress on minority ethnic representation on UK boards
Currently, 96 FTSE 100 firms meet that benchmark for directors.
The latest data from Spencer Stuart shows however that only 4% – or seven individuals – of the 196 new directors appointed in the year to April were from a self-declared ethnic minority background.
This represents a significant slump from the 15% of new directors from the previous financial year. Currently, a total of 12.5% of all directors are from an ethnic minority.
Shami Iqbal, UK managing partner at Spencer Stuart, said: “It is disappointing to see a further slowdown in progress on minority ethnic representation on UK boards.
“Diversity means having talent around the boardroom table representing a wide range of views and backgrounds, seeing this as a strength and leveraging this talent to the company’s advantage.
“While the Parker Review results show concerted action, boards must be careful not to adopt a ‘one and done’ mentality.”
It is encouraging to see companies answer the call to action on increasing female representation in senior positions, but the low number of female CEOs and chairs still leaves a lot to be desired
The latest analysis however pointed to a record high in female representation in senior director roles.
The recent FTSE women leaders review led to a target that firms should have at least one woman within the four most senior board and leader roles – chair, chief executive, chief financial officer and senior independent director (SID) – by next year.
Around 71% of boards reported having at least one woman across these roles, up from 60% in 2023 on the back of an increase in new female appointees.
However, there is still a way to go to reach this target as 43 boards still have men occupying all four roles.
Chris Gaunt, head of Spencer Stuart’s UK board practice, said: “It is encouraging to see companies answer the call to action on increasing female representation in senior positions, but the low number of female CEOs and chairs still leaves a lot to be desired.
“While seen by many as the path of least resistance in meeting the FTSE women leaders targets, the surge in female SID appointments hopefully points to an increase in female chairs in the years to come – although term limits make it a less likely direct promotion path for existing boards.”
