· News

BAME diversity on FTSE 100 boards falls

?The number of directors at Britain’s biggest companies from black, Asian and minority ethnic backgrounds is falling, according to a new report

The research from Green Park Group, an executive recruitment consultancy chaired by former head of the equality watchdog Trevor Phillips, looked at the make-up of company boards and senior management as of August 2019.

It found that the proportion of directors and executive committee members from BAME backgrounds in the FTSE 100 fell from 8.8% in 2018 to 7.4% in 2019.

Almost half (47) of the FTSE 100 companies have boards and executive committees with no one from a BAME background. In total, there are only ten BAME chairmen, chief executives and finance chiefs on boards.

Associated British Foods, the owner of Primark, and Rio Tinto were among the firms with no BAME board representation.

Diversity also appears to be lacking among the future talent pipeline, with five FTSE 100 companies having no BAME leaders among their top 100 managers who are categorised as being potential future senior executives. Overall, ethnic minority managers made up just 10.7% of FTSE 100 companies’ top 100 staff, almost unchanged from 10.6% last year.

The news comes as businesses face growing pressure to address gender and ethnic disparities in the workplace. The government-backed Hampton-Alexander Review said last month that half of all senior leadership roles in FTSE 350 companies must go to women in 2020 if the review’s target of 33% women in leadership positions by the end of 2020 is to be met.

Hephzi Pemberton, founder of Equality Group, said that reporting is needed to shift the dial on BAME representation at senior levels.

“It is only when we begin to assess and fully understand the scale of the diversity issue within the workplace that we can appropriately gauge how businesses can progress and begin to represent the society they work within,” she said.

"By highlighting the lack of ethnic representation at director level within UK businesses we can work to ensure that the number of ethnic minority directors within the FTSE 100 doesn’t drop for a third year in a row in 2020."

Permberton added that everyone benefits from improved diversity and inclusion.

“It has been statistically proven that the advantages of diversity extend beyond the BAME community, increasing the overall health and profitability of a business,” she said.

"Diverse companies can attract, develop and retain a broader talent pool which allows them to serve niche markets with a better understanding of their customers.”

Phillips, ex-chairman of the Equality and Human Rights Commission, said that a lack of diversity puts companies at a competitive disadvantage.

“If companies want to sell across the globe, particularly the Far East, Africa and South America and have a leadership that doesn’t look like the modern world, then actually they’re not going to be able to compete with, for example, Chinese companies,” he said.

“Our feeling is that business leaders are patting themselves on the back because they’re getting more women into the boardroom, but they are forgetting that there are other kinds of diversity. And the women they congratulate themselves on recruiting are still largely white.”

There was only four BAME FTSE 100 chief executives when Green Park compiled its data back in August: Arnold Donald, of Carnival, the cruise business; Prasanth Manghat of NMC Health, the private hospitals group; Rakesh Kapoor, of Reckitt Benckiser, the consumer goods business; and Namal Nawana, of Smith & Nephew, the healthcare manufacturer. The latter two have since stepped down.