On 11 March 2024, the Parker Review published Update Report: Improving the Ethnic Diversity of UK Business, which sets out findings from its latest voluntary census on the ethnic diversity of the boards and senior management of FTSE 350 and large UK private companies as at 31 December 2023, carried out jointly with the DBT (EY Press Release). In addition to highlighting continued progress across the FTSE 350 towards meeting the Parker Review's benchmark recommendations on board composition, the 2024 report considers for the first time data submitted by respondents on ethnic minority representation in FTSE 350 senior management teams and the boards of 50 of the UK's largest private companies.
Background
The Parker Review's first report published in 2017 made a series of recommendations to improve the ethnic and cultural diversity of the UK's leading companies, including a 'one by 21' target that FTSE 100 companies should have at least one ethnic minority director on their boards by December 2021. For FTSE 250 companies, the deadline was set for December 2024. Since 2020, the Parker Review has published annual reports monitoring the FTSE 350's progress towards meeting these targets (see FC Features 17 March 2022 and 14 March 2023).
In its 2023 report, the Parker Review extended the scope of its recommendations by setting a target for 50 of the UK's largest private companies of having at least one ethnic minority director on their main board by December 2027. The Review also invited FTSE 350 companies and the selected large private companies to set their own individual targets for the proportion of ethnic minority representation in their senior management teams, to be met by the same date (see FC Feature 14 March 2023). Companies were asked to submit information relating to these new targets to the Review.
Results of 2023 census
FTSE 350 companies
The Parker Review is encouraged by the FTSE 350's overall progress in improving ethnic diversity at board level in recent years. As at 31 December 2023, 96% of FTSE 100 companies had ethnic minority representation on their boards, mirroring the position in 2022. The number of FTSE 100 boards with more than one minority ethnic director rose from 49 in 2022 to 56 in 2023. Directors from an ethnic minority background represent 19% of all FTSE 100 directors, an increase of 1% from 2022.
Significant progress was made by FTSE 250 companies during 2023, with 79% of those responding to the census having at least one ethnic minority director on their boards by December 2023 (2022: 67%). The Review encourages those FTSE 250 companies that have no ethnic minority directors to consider what they might be able to do to meet the target deadline of December 2024.
The Parker Review is particularly pleased to see increased representation in the most senior board roles. The number of ethnic minority CEOs in the FTSE 100 rose from 7 to 12 during 2023, and the number of chairs from 6 to 7. For FTSE 250 companies, the number of ethnic minority chairs increased from 5 to 8 by the end of 2023 and the number of ethnic minority CEOs was unchanged at 14.
All FTSE 100 companies and 89% of FTSE 250 companies submitted data on board level positions. In response to the Review's expanded scope, 82 FTSE 100 companies provided information on their senior management teams and the proportion who identify as minority ethnic. On average, 13% of FTSE 100 senior management positions are held by people with ethnic minority backgrounds. 48 respondents reported that they had set targets for the proportion of ethnic minorities in their senior management by December 2027, ranging from 5% to 45%. 50 FTSE 250 companies submitted their targets to the Review, which also ranged widely from 5% to 50%. Approximately 12% of FTSE 250 senior management positions are held by ethnic minorities.
Private companies
36 of the 50 private companies invited to participate in the Review provided data about their board composition. 61% of respondents reported having at least one ethnic minority director on their main board in advance of the December 2027 target deadline.
The Parker Review hopes a greater number of these companies will respond in future years and engage with setting and reporting on targets for the proportion of ethnic minorities in their senior management by December 2027.
First published on the Employment and Corporate News Service on 12 March 2024.
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