FTSE 350 companies are being asked to set a percentage target for senior management positions that will be occupied by ethnic minority executives by 2027.
The Parker Review, the independent, business-led review of ethnic minority representation at UK companies supported by the government, has published its findings from its 2022 census and set new targets for companies.
In its first report in 2017, the Parker Review made a series of recommendations and set a ‘one by 2021’ target for all FTSE 100 boards to have at least one director from a minority ethnic background by December 2021. The review also set a similar ‘one by 2024’ target for all FTSE 250 boards.
Today’s review found 96 of FTSE 100 companies have met the target of having at least one minority ethnic director on their boards, up from 89 last year, with 49 of those companies having more than one ethnic minority director.
FTSE 250 companies are also making progress towards the 2024 deadline of appointing at least one minority ethnic director, the review found, with 67% of companies that responded meeting the target in 2022, up from 55% last year.
David Tyler, chair of the Parker Review committee, said: “Our latest data demonstrates that continuing progress is being made by FTSE 350 companies to bring ethnic minority directors on to their boards.”
The review has therefore set new targets, including setting ethnic minority executive targets by 2027 and asking 50 of the UK’s largest private companies to have at least one ethnic minority director on the main board by December 2027. These companies will also be asked to set a target for the percentage of ethnic minority executives within their senior management teams.
Nusrat Ghani MP, UK business and trade minister, said: “With more and more boardrooms voluntarily hitting their ethnicity targets this year, it’s clear that UK companies are on the right course for achieving true diversity in business.
“There’s still more to do however, and the Parker Review’s recommendations clearly set out how companies must improve diversity from top to bottom in the coming years, so they can make the most of untapped talent available and ensure British boardrooms and senior management teams are truly reflective of British society.”
Hywel Ball, EY UK chair and UK&I managing partner, added that additional targets will help drive change, break down barriers and improve the diversity of UK business.
“Diversity can’t just be a boardroom issue. Companies need to ensure they are taking action across every part of their business. As leaders we have an important role to play by setting the tone from the top, ensuring that we are fostering diversity of thought and creating equal access for all,” Ball said.
Commenting on today’s review, Andrew Ninian, director for stewardship, risk and tax at the Investment Association, welcomed the new targets and said: “The current challenging economic environment means that now more than ever there is a need for high-quality and diverse boards. Investors recognise that good progress continues to be made by FTSE 350 companies on board ethnic diversity, although there is still room for improvement, and we encourage all FTSE 350 companies to meet the target by next year.”