According to the government-backed Parker Review Committee, set up to improve the diversity of UK boards, at least one ethnic minority member now sits on the boards of most of the UK’s biggest companies.
In recent years, improving boardroom diversity has gained popularity among policymakers and investors due to its benefits in addressing social inequalities and leading to better business decisions and performance.
Boardroom diversity is also becoming increasingly important to shareholders. For example, in October 2020, Legal and General Investment Management sent a letter to FTSE 100 nominations committee chairs advising that it would vote against their reappointment if they did not meet ethnic diversity expectations.
“Our December 2021 target of every FTSE 100 company having at least one board director from a minority ethnic background has nearly been met,” said John Parker, chairman of the Parker Review Committee.
“We have also secured commitments from many of the outstanding companies, which means it is likely that circa 97% of current FTSE 100 companies will comply with the target by the middle of 2022.”
In 2021, the number of FTSE 100 companies to meet the voluntary target rose to 89 from 74, and by March 2022, a further five had done so.
There are three companies still to commit: one is in the process of being acquired and will delist, another is a Russian steel and mining group leaving the FTSE 100, and the third is a US subsidiary.
The majority of ethnic minority board members are non-executive, and only six are chief executives at FTSE 100 companies, while 16 are the CEOs of FTSE 250 companies.
According to the report, one hundred and twenty-eight companies in the FTSE 250 now meet the target ahead of an end-2024 deadline. The targets for both the FTSE 100 and FTSE 250 were initially set in 2017.