Nearly 20 percent of FTSE 100 companies lack board level diversity

Almost a fifth of FTSE 100 companies are still led by all-white boardrooms but recent survey figures show a promising outlook, according to Arun Batra, partner at EY and CEO of the national equality standard.

“I’m feeling really buoyant by the fact that there has been this real uplift,” says Batra. “The data sets that we had for 2017 to 2019 were not showing much progress at all. There’s been a real uplift in activity, and we remain hopeful that we’ll be there or thereabouts to hit the target.”

Set up in 2017, the government-backed Parker review set a ‘One by 2021’ target for all FTSE 100 to have at least one non-white member on their boards before the end of 2021.

The results show that 21 companies, including asset management M&G and London Stock Exchange Group, do not have any ethnic minority representation on their boards.

Held in November, 97 of the 100 listed companies responded to the survey. Out of those, 81 companies had met the review’s target, an increase of 55 percent, compared to 52 the year before.

Since then, an additional seven companies have stated they have appointed a non-white board-level director.

External forces are playing a role in prompting firms to take action says Batra. He says the events of the Black Lives Matter protests over the summer last year provided a “lightening jolt” for wanting to address areas of discrepancy that were currently in existence.

“The whole world has encouraged people to stop and reflect and realise, actually, this should be about far more than just a few select group of people,” he says.

“The global protests from the summer of 2020 have highlighted a societal backlash against organisations which look and stay the same,” said Shereen Daniels, founder and managing director of consultancy firm HR rewired, in an email.

“There is increasing demands from a variety of stakeholders for executive leadership teams to take credible and decisive action to address racism and the lack of representation.”

However, there is still scepticism on some of the motivations among companies for appointing someone from a minority ethnic background.

“Sometimes we get clients coming to us to go through the process in order to be able to win a contract, because it’s a requirement of the contract,” says Batra, who leads the national equality standard. “That makes me feel slightly uneasy, because I know that the motivator for reacting to want to work with us is probably not about doing the right thing and more about making sure they win the contract.”

Some critics argue that setting targets for diversity diminishes the goal of encouraging meaningful change.

“The commercialisation of diversity and inclusion has softened what it was originally designed to do,” said Daniels. “Which is to ensure there is fairness and equality for ‘ethnic minorities.’

“We have been satisfied with using quotas as one of the few approaches to increasing representation but without acknowledging the real barriers – that is systemic racism – and our discomfort in talking about the reasons why minoritised individuals are continuously overlooked and under-supported.”

The Parker review set the same target for FTSE 250 companies with a deadline of 2024.