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Britain toughens up diversity targets for UK companies
Global Banking & Finance Review®
Company
By Huw Jones
LONDON (Reuters) – Britain’s top listed and private companies on Monday were called on to meet broader voluntary targets for appointing ethnically diverse board members and senior staff by 2027.
The Parker Review Committee was set up by government in 2015 and recommended ethnic diversity targets for the boards of Britain’s top listed companies.
It is part of wider efforts to have more women and people from modest social backgrounds in top corporate and financial roles.
The committee said that in 2022, 96 of the FTSE 100 companies met a target of at least one minority ethnic director on their boards, with 49 having more than one minority ethnic director, effectively meeting a goal it set in 2017.
Ethnic minorities now account for 190 of the 1,064 board positions at FTSE 100 companies, 31 as chairs or executive directors.
The next tier down of 250 listed companies are making progress towards a 2024 deadline of one minority ethnic director, with 67% meeting the target last year, the committee said.
“There’s still more to do however, and the Parker Review’s recommendations clearly set out how companies must improve diversity from top to bottom in the coming years, so they can make the most of untapped talent available and ensure British boardrooms are truly reflective of British society,” business minister Nusrat Ghani said in a statement.
The new targets call on each of the top 350 listed companies to also set a percentage target for senior management positions by December 2027.
In addition, 50 of the largest unlisted companies, such as law firm Allen & Overy, auditor Deloitte, retailer John Lewis Partnership, Virgin Atlantic and Thames Water have been asked to have at least one ethnic minority director by December 2027.
“We have long argued that companies benefit from ensuring that succession planning and management development plans include the development of ethnic minority executives,” committee chair David Tyler said.
(Reporting by Huw Jones; Editing by Robert Birsel)
Corporate governance refers to the systems and processes that direct and control a company, ensuring accountability, fairness, and transparency in a company's relationship with its stakeholders.
Diversity in the workplace refers to the inclusion of individuals from various backgrounds, including different races, genders, ages, and cultures, promoting a more inclusive and innovative work environment.
The Parker Review Committee is a group established in the UK to promote ethnic diversity on boards of companies, recommending targets for the appointment of minority ethnic directors.
Unlisted companies are businesses that do not trade their shares on a public stock exchange, often having fewer regulatory requirements compared to publicly listed firms.
A minority ethnic director is a board member who belongs to a racial or ethnic group that is underrepresented in the corporate environment, aiming to enhance diversity and representation.
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