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