FTSE firms ‘dragging their feet’ over ethnic diversity on boards

Black women board room

FTSE 100 firms including Tui, British Airways owner IAG and the London Stock Exchange Group have been accused of dragging their feet on diversity targets ahead of a looming 2021 deadline.

Only 53 of Britain’s largest listed firms on the London Stock Exchange have at least one director from an ethnic minority, according to figures compiled for the second annual update on the Parker review. That is a small increase from the 49 companies that had met the target since the review was launched in 2017.

Among the FTSE 100 companies that have failed to take steps to improve diversity are mining firm Glencore, wealth management firm St James’s Place and housebuilders Taylor Wimpey and Persimmon.

The Parker review gave FTSE 100 firms four years to appoint at least one non-white board-level director. The same target was set for the FTSE 250 but with a deadline of 2024. Only 54 of the firms listed on the FTSE 250 have reached that goal.

The slow progress has drawn wide criticism from lobby groups, regulators and government ministers, including business secretary Andrea Leadsom. “Research shows that diverse businesses are the highest performing businesses,” she said.

“There are some really commendable company initiatives on improving ethnic minority representation and supporting a diverse talent pipeline. However, we are now less than two years off the first of these target dates, and it is clear that not enough is being done by the FTSE 100 as a whole to deliver.”

The review heaps pressure on firms which are also being urged to boost the number of women on their boards and executive teams by the end of this year.

It found that few companies have set measurable targets for the ethnic composition of their board, with just 14% of the FTSE 100 and 2% of FTSE 250 firms doing so.

The Financial Reporting Council, the accounting regulator, said it expected “much improved reporting” around ethnicity as part of its new UK corporate governance code.

The FRC’s chief executive, Sir Jon Thompson, said: “It is unacceptable that talented people are being excluded from succession and leadership simply because companies are failing to put in place appropriate policies on boardroom ethnicity, are not setting targets, or are not monitoring their progress against policies.”

The Parker review update relied on voluntary disclosure from companies to report on their progress. Just 30 of FTSE 100 firms confirmed they had not met their targets, while a further 13 failed to provide clear information about their board’s ethnic composition. Four of the UK’s largest listed companies, including JD Sports, did not respond to requests for data.

Burberry was originally named among the companies which had failed to diversify its board, but the company has appointed Debra L. Lee as a non-executive director since the data was compiled.