Progress has been made but research shows there is still more to do if businesses are to achieve this important milestone.
Of the FTSE 100 firms that responded to the 2020 Parker Review survey, over a third (37%) still had no ethnic minority representation at board level. This increases to 59% of FTSE 250 boards, who have a target of one ethnic minority director on their boards by 2024.
While the number of all-white boards had declined since the 2017 Review, it was clear that some businesses needed to get more granular with their structures and processes, and overcome the barriers holding back progress.
The disparities highlighted by COVID-19 and the tragic killing of George Floyd this year have spurred honest conversations around race and ethnicity and equal opportunity in both the workplace and wider society. There is growing pressure for businesses to show their stance on racial inequality in new, meaningful ways.
Words are no longer enough; tangible actions to drive progress are required. Leaders need to ensure they are taking leaps not steps to be actively anti-racist and to address under-representation in their workforce, especially at senior levels.
Business leaders need to ensure that Black and ethnic minority colleagues are supported, have access to equal opportunity, are represented at board level, and acknowledge that change will not happen on its own.
Businesses still have time to meet the Parker Review 2021 target, but doing so will require concerted effort. There are no easy answers or quick fixes but, based on my work with the Parker Review and other business, the following recommendations may provide a useful starting point.
Tone from top
Firms must place equality, accountability, transparency, and inclusion at the top of their business agenda. Leadership need to truly believe in the value of diverse backgrounds, experiences and voices at board level and the wider success this can achieve.
Genuine buy-in and embedding the importance of diversity in a business within everyday behaviours and communications is key. This will help enable organisations to be bold and ensure D&I remains a priority.
Create new roles
For some organisations, part of the solution may be to create new roles on their board. For example, enabling high-performing Black and ethnic minority individuals to second onto the board, get a feel for the responsibilities and demonstrate their full potential, could encourage more businesses to consider diverse talent for board positions. It would also allow these individuals to build their network and work alongside people they may otherwise not have had the opportunity to.
Data is and will continue to be critical for addressing racial inequality in the workplace. Businesses need to forensically investigate the data they have available in their business to truly understand the makeup of their workforce. For example, ethnicity pay gap reporting can play an important part in this. The data can provide a clearer picture of where inequality exists in the workplace, highlight areas lacking ethnic minority representation, and ultimately help hold businesses to account on the progress they’re making. It can also inform decision making and D&I initiatives.
Strengthen your talent pipeline
HR teams need to take proactive steps such as reviewing their talent lifecycle and examining how they interact with recruiters to identify talent. These steps will be crucial to strengthening the pipeline and getting more ethnic minority individuals into senior board roles.
Setting clear targets for recruitment, promotion and senior appointments can help provide focus and refine the actions needed to reach these goals. Implementing talent programmes to nurture diverse talent, mentoring, coaching, and sponsorship can also help accelerate the progression of diverse individuals.
Being open and transparent about the diversity of your board and workforce is an important step to understanding where there is unequal opportunity and lack of representation in the business.
While almost 300 FTSE firms engaged with the Parker Review and provided detail on the makeup of their board on request, only 12% of FTSE firms report on the ethnic minority diversity of their board in their annual result, according to recent EY research on corporate reporting requirements.
This discrepancy demonstrates that many businesses still don’t share this level of detail publicly, which is a crucial part of holding a business to account and increasing the diversity and inclusiveness of their organisation
Women on boards shows we can achieve real change
Concerted effort and growing momentum in recent years has seen FTSE businesses meet the Hampton-Alexander target. We know that, with continuous effort, diversity targets can be reached and we can achieve the progress we want to see.
Diversifying boardrooms and meeting the Parker Review target won’t happen overnight and, importantly, won’t happen without determination and courage. Leaders must be bold, become agents for change and use their position of power, privilege and influence to turn intent into action.
Arun Batra, EY partner, CEO of the National Equality Standard and adviser to the Parker Review