Wednesday 02 November 2016 12:01 am

Government-backed review calls for an end to all-white company boards

Every FTSE 100 company board should have at least one director of colour by 2021, and each FTSE 250 Board by 2024, a government-backed report out today has recommended.

The report reveals that out of 1,087 director positions in the FTSE 100, only eight per cent of positions are held by directors of colour, of which 1.5 per cent are UK citizens, despite the fact that 14 per cent of the total UK population is from a non-white ethnic group, up from two per cent in 1971.

“The boardrooms of Britain’s leading companies do not reflect the ethnic diversity of either the UK or the stakeholders that they seek to engage and represent. Ethnic minority representation in the Boardrooms across the FTSE 100 and 250 is disproportionately low,” said Sir John Parker, who was appointed in 2015 to chair the industry-led review, adding it “is not an exercise of tokenism.”

The reports recommendations include:

Nomination committees of all FTSE 100 and 250 companies should require their human resources teams or search firms (as applicable) to identify and present qualified people of colour to be considered for board appointment when vacancies occur;
The relevant principles of the Standard Voluntary Code of Conduct for executive search firms, in the context of gender-based recruitment, should be extended to apply to the recruitment of minority ethnic candidates as board directors of FTSE 100 and 250 companies;
FTSE 100 and 250 companies should develop mechanisms to identify, develop and promote people of colour within their organisations to build a pipeline of board capable candidates and their managerial and executive ranks appropriately reflect the importance of diversity to their organisation, and
Companies that do not meet Board composition recommendations by the relevant date should disclose in their annual report why they have not been able to achieve compliance.

Business minister Margot James praised the reports recommendations, saying:

The boardroom must reflect modern Britain. Companies will do better if they make better use of the talent available and increase boardroom diversity to reflect their workforces and wider society. Sir John Parker's review is an important, industry-led contribution and I look forward to the results of the consultation.

A consultation on the report opens from today and the final recommendations and findings of the review will be published in 2017.