Top UK firms failing to increase boardroom diversity, study shows

Britain’s largest companies are failing to improve the ethnic diversity of their boardrooms, according to a study that found the number of black, Asian and minority ethnic executives fell over the past year.

The total number of BAME board members, both executive and non-executive, decreased to 7.4%, down from nearly 9% in 2018, while the number of chairs, chief executives and finance directors remained at 3.3%, the recruitment consultancy Green Park found.

Related: Top firms failing to increase number of ethnic minority directors

The firm, which is chaired by the former Equalities Commission head Trevor Phillips, said it was disappointed by the results, which showed the UK’s FTSE 100 companies have been failing to follow their successful US counterparts “by properly resourcing change”.

Forty-Seven companies still have no BAME people at board and executive director level – just 14 fewer than in 2014.

The study found the pipeline for BAME executives was also squeezed after a year of zero growth in the number below board level, “raising significant concerns about the prospects for any future improvement at board and executive committee level”, the report said.

It called on firms to appoint a chief diversity officer, as half of US companies have done, or face “commercial risk, regulatory attention and losing key talent to global competitors”.

The report follows a similar exercise by the government to chart the progress of BAME executives that followed the Parker review in 2017. A follow-up review last year found the number of FTSE 100 company directors from BAME backgrounds declined to just 84 out of 1,048 director positions in the 100 biggest companies, down from 85 the year before.

The Parker review set a target for the FTSE 100 to appoint at least one board-level director from a BAME background by 2021. An update covering 2019 was expected this month, but has been delayed until next year due to the election.

Green Park said its annual Leadership 10,000 report analysed gender and ethno-cultural diversity in the top executive posts in the year to August, and found continuing progress on gender diversity after a increase to 28.8% female representation on boards. However, BAME representation at board level had stalled and homegrown talent was scarce.

Arnold Donald, an African-American born in New Orleans, has been the chief executive of cruise ship operator Carnival since July 2013. Rakesh Kapoor, the chief executive of Reckitt Benckiser, was born and educated in India, as was NMC Health boss Prasanth Manghat. Two of the other 10 names on the list of top bosses are the billionaire majority owner and chair of NMC Health, Dr B R Shetty, and its finance director, Prasanth Shenoy, also born and educated in India.

Namal Nawana, an Australian businessman, is the chief executive of drugs firm Smith & Nephew.

Phillips said: “Our latest analysis shows that after five years of monitoring, the promise that things would change over time for ethnic minority leaders in the FTSE 100 looks just as empty as the corporate pipeline. Women are cracking the glass ceiling; but people of colour remain super-glued to the corporate floor.”