More than a third of UK firms have no ethnic diversity on their executive teams, according to the latest startling figures from a new McKinsey & Co. report.
The research also shows that ethnic diversity within leadership exec teams stands at just 13% in the UK and US combined.
The numbers have improved by just 6% in five years and leave the UK and US lagging behind the rest of the world.
Meanwhile, ethnic diversity on UK and US boards has seen a percentage point rise of just 0.8% in the same period from 13% in 2014 to 17% in 2019.
The latest research draws on data from over 1000 companies in 15 countries, and reveals the slow progress being made to diversify leadership positions.
Female representation on executive teams fares slightly better. In the UK and US it rose from 15% to 20% between 2014 and 2019. Globally, the number has only risen by one percentage point to 15% — with more than a third of companies having no women at all on their executive teams.
At the current rate of progress, it will take the average UK company 24 years to reach gender parity on executive teams.
The report also clearly demonstrates that diversity is a vital component of financial growth, with companies in the top quartile for ethnic or cultural diversity in their executive teams being 36% more likely to experience above-average profitability.
Firms with the greatest gender diversity in executive teams are 25% more likely to experience above-average profitability.
Meanwhile, companies with the smallest proportion of ethnic and gender diverse staff are 27% more likely to underperform on profitability. Yet in nearly all 15 countries in the report, women are underrepresented on executive teams.
McKinsey’s UK and Ireland managing partner Dame Vivian Hunt said: “Yet again, our research has shown that aside from the moral imperative for increasing inclusion and diversity, many companies are missing out on the opportunity to critically boost to their bottom line.
"We must remain vigilant, as our research shows, progress is too slow. While there has been great enthusiasm from many companies on improving inclusion and diversity, these efforts are not cutting through to employees on the ground or are the wrong set of interventions.
“More than ever, leaders and managers will need a great deal of resolve and resilience on these matters as they seek to navigate an economically and socially viable path toward a 'next normal'."
The report also warns that early signs suggest the COVID-19 crisis could deepen the gap between inclusion and diversity leaders and laggards.