FTSE 100 set target to have one BAME director by 2021
FTSE 100 companies are to aim to have at least one Black Asian Minority Ethnic (BAME) director by 2021 and FTSE 250 by 2024 as part of the Parker Review which sets out achievable objectives to encourage greater diversity, with only 8% of 1,050 FTSE 100 directors currently BAME
12 Oct 2017
The Parker Review ‘Beyond one by ‘21’ has been published today and considers how to improve the ethnic and cultural diversity of UK boards by setting objectives and timescales for the FTSE 350 to aim towards to improve ethnic diversity.
Currently, only 85 (8%) of the 1,050 directors in the FTSE 100 are BAME directors and 51 companies have no BAME directors at all, while only seven companies account for over 40% of the BAMe directors.
The review set out several recommendations to improve diversity including setting targets for FTSE 100 boards to have one BAME director by 2021 and FTSE 250 by 2024.
Other recommendations include creating a nomination committee to require HR teams to find and present people of colour for board appointments and the Standard Voluntary Code of Conduct should be extended to the recruitment of ethnic minority candidates.
Large companies should also develop candidates for pipeline and plan for succession. Exisitng board directors should mentor BAME people within their companies to ensure their readiness to enter senior or executive positions.
A description of the board’s policy on diversity should be set out in the company’s annual report and should include a description of what measures the company is taking to improve ethnic diversity. Those companies that are unable to achieve compliance by the deadlines set should state the reasons why in their annual reports.
John Parker, chairman of the Parker Review Committee, said: ‘Today’s FTSE 100 and 250 Boards do not reflect the society we live in, nor do they reflect the international markets in which they operate. Whilst we are making good progress on gender diversity in the Boardroom, we still have much to do when it comes to ethnic and cultural diversity.
‘Our report has identified clear commercial benefits in addressing this issue, and it is crucial to make progress in this area if we want Britain to continue to be at the forefront of global business. We also outline some business-friendly recommendations, which aim to not only increase the ethnic diversity of Boards in the near term but also develop a strong pipeline of candidates for the future. These recommendations received overwhelmingly positive feedback and we have now provided some practical tools to help Boards implement them.
‘I look forward to seeing a change in the Boardroom as we continue to track progress in the coming years.’
Number of BAME directors at FTSE 100 companies
|Company||Total directors||BAME directors|
|British American Tobacco||13||2|
|Morrison (Wm) Supermarkets||7||1|
|Marks & Spencer||11||1|
|Smith & Nephew||11||1|
|Royal Dutch Shell||12||1|
|Royal Bank of Scotland||16||1|
|Scottish Mortgage Investment Trust||6|
|Associated British Foods||9|
|Micro Focus International||9|
|Direct Line Insurance||10|
|Legal & General||10|
|Paddy Power Betfair||10|
|International Consolidated Airlines||11|
|London Stock Exchange||11|
|St James's Place||11|
|British Land Co||12|
Parker Review - A Report into the Ethnic Diversity of UK Boards is available here.
Report by Amy Austin