Wed. Jan 26th, 2022

FTSE 100 companies have been encouraged to commit to plans to appoint at least one councilor from an ethnic minority background by Sir John Parker, whose review of diversity in council chamber ends in December.

Parker, who sits on the boards of Pennon Group, Laing O’Rourke and Carnival Corporation, has been appointed by the British government to oversee a review of British council chambers to ensure that each has at least one ethnic minority director.

Its five-year review closes at the end of 2021 for FTSE 100 companies, although FTSE 250 companies still have three years to reach the target.

Parker told the Financial Times he would be “disappointed if we are not very close to getting the vast majority there” by the time he releases his final report early next year.

He added that this progress was despite the pandemic, which he said undoubtedly disrupted the recruitment plans.

But he said he was not complacent about the progress being made by British companies, despite significant efforts to rebalance council chambers to better reflect society so far.

“I would hope that all FTSE 100 companies will have very clear plans and indeed take action on them,” he said. “I am optimistic, because I think there is significant momentum behind it. Undoubtedly, Black Lives Matter accelerated the momentum. But I am proud of the fact that the UK started early relative to the USA. ”

The last update of the review in March 2021 found that the number of FTSE 100 companies with ethnic minority representation on their boards increased to 81, compared to 52 in January 2020.

The survey showed that 124 of the 998 board positions across the responding companies were held by ethnic minority directors. About a third were British, while a tenth sat on two or more FTSE boards.

But the survey found that progress has slowed down in key functional roles of boards, with only five FTSE 100 executives and two chairmen coming from ethnic minority backgrounds.

Parker said the next target would be to improve the representation of minorities in executive roles and committees, “to build the executive pipeline within the company – not just under the board”.

He added: “When you plant a flag in the boardroom, it’s a big signal to the organization as a whole.”

Parker said changes in the boardroom took time, given the need for seats to become available and the time needed to process applications. But he said CEO hunters are now better off offering a more diverse range of candidates to boards.

“I think the challenge of why there is no more [directors from ethnic minority backgrounds] is that we should have started earlier. ”

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