Nearly all FTSE 100 boards have met ethnic diversity targets set by the Government's Parker Review, but progress is still slow at executive level.
A report by Sir John Parker, who was appointed by the Government in 2015 to boost ethnic diversity in UK boardrooms, found 89 of the FTSE 100 Index firms had minority ethnic members on their boards in time for the end-of-year target.
It said another five appointments had been announced by top-tier firms since the year-end, with a further three in the advanced recruitment process, leaving just three firms to signal their commitment.
In 2017, Sir John set a goal for all FTSE 100 boards to have at least one director from a minority ethnic background by December 2021. A similar target was set for FTSE 250 boards, with a deadline of 2024.
Just over half – 128 – of FTSE 250 firms had at least one director from a minority ethnic background at the end of 2021.
The latest figures mark a significant improvement since the review was launched, with just half of boards having ethnic minority representation in 2015.
Now, around 16% of all FTSE 100 board roles – 164 out of 1,056 – are held by minority ethnic directors.
Sir John hailed an “extraordinary sea change” within listed firms on diversity and inclusion.
He said: “The progressive leadership in FTSE boardrooms deserves our congratulations and fulsome praise for their positive response to a range of initiatives over the past decade including this review.
“Their success places UK listed companies at the forefront of global governance, gender and ethnic diversity. This will be a winning combination in a competitive world with fast-changing demographics.”
But the report also revealed most firms are still yet to have diversity in their executive roles, with just six FTSE 100 and 16 FTSE 250 chief executives coming from a minority ethnic background.
There are also only three minority ethnic chairs in the top tier and five in the FTSE 250.
Business Secretary Kwasi Kwarteng said: “While there is still more to do, today’s findings demonstrate the great strides being made – particularly at FTSE 100 level – to increase ethnic diversity on boards, as more of Britain’s biggest companies recognise the business case for diversifying their teams so that they better reflect the society we live in.”
Of the three FTSE 100 firms yet to make strides to meet the target, one of these is being bought by a US firm, another is a Russian steel and mining company which will shortly be removed from the FTSE 100, while the other is a UK subsidiary of a US firm.
Sir John is now set to step down from the review committee and hand over the lead role to current co-chair David Tyler, who was formerly chairman of supermarket Sainsbury’s and shopping centre owner Hammerson.
The report was welcomed by the CBI business group, which called for the FTSE 250 to follow the lead of the top tier and “end the all-white boardroom”.
Lord Karan Bilimoria, CBI president and chair of Change the Race Ratio, added: “UK plc has reached an important way point, and it’s time to step up the pace of progress. The FTSE 250 must show the same effort and focus to improve ethnic diversity at senior levels.”
