Attempts to increase ethnic diversity in the boardrooms of the UK’s biggest companies are heading backwards, according to research which shows a fall in the pool of non-white talent being groomed for boardroom seats in FTSE 100 firms.
The proportion of non-white managers in 7,700 positions below the boardroom level of FTSE 100 companies has fallen to 5.7% from 6.2% a year ago, the study found. “[This is] an extremely disappointing result, possibly the most significant of our study: a decline in levels of non-white representation. In effect, the FTSE 100 has lost almost 40 of approximately 480 non-white leaders,” it said.
The research, conducted by Green Park executive recruitment and published on Monday, follows findings published in December which showed that 62% of FTSE 100 companies have all-white boards, up from 61% the year before. This is despite a campaign by the previous business secretary, Vince Cable, to encourage companies to ensure they recruit at least one non-white director by 2020. It is not clear if the new government intends to adopt this policy. The research did not find an executive director of Chinese or east Asian heritage.
In the 2011 census, 87% of the population described themselves as white.
Raj Tulsiani, chief executive of Green Park, said: “Despite all the focus on increasing diversity within the FTSE 100 to help business operate more competitively around the world, our research shows that UK companies are getting less ethnically diverse rather than more over the past year. It’s particularly concerning to see that at pipeline level, we’ve lost such a large number of potential ethnic minority leaders, suggesting that the situation is likely to continue to worsen rather than improve in the future.”
Of the lack of Chinese and east Asian people, Tulsiani said: “We know that this group forms the single most successful educational demographic in the UK, and has done for quite some while, so big companies need to ask themselves, why are they not drawing on this group’s talent and insights to help provide a competitive edge in targeting important markets for growth?”
At boardroom level there has been an increase in the number of non-white chairs as a result of the elevation of Hikma Pharmaceuticals into the FTSE 100 in March. Its chairman, Said Darwazah, joins Jac Nasser of mining company BHP Billiton and Fred Phaswana of paper and packaging group Mondi in the league table.
The departure of Tidjane Thiam as chief executive of Prudential – he quit to run Credit Suisse – helped reduce the number of non-white FTSE 100 bosses from six, along with the ejection of oil services firms Petrofac and Amec from the index.
The inclusion of Darwazah, who holds the joint chairman and chief executive role at Hikma, puts the total at four. The other three are Carnival’s Arnold Donald, Ivan Menezes at Diageo and Rakesh Kapoor at Reckitt Benckiser.
The Green Park study also looked at gender diversity in boardrooms, which were challenged by Cable to have 25% of roles occupied by women this year. The report found an increase in the number of female chairs in the FTSE 100 from one to three as Susan Kilsby of pharmaceutical company Shire and Sarah Bates of wealth management firm St James’s Place join Alison Carnwath from Land Securities. The number of female chief executives has also increased from four to five.
According to Green Park, women comprise 12.6% of executive directorships on boards, up from 9.6%, and 27.9% of non-executive positions, up from 23.9%. At the so-called operating board level, just below the main board, the proportion is 18.7%, little changed from 18.2% a year before.
