Corporate governance – ethnic diversity on boards

The Parker Review has published its 2021 update on ethnic diversity on FTSE 100 boards, along with the results of its latest survey. The update notes that, whilst change remains slow in the key functional roles, significant progress has been made despite disruptions to board recruitment processes due to Covid-19.

The government commissioned the Parker Review in 2015, with a view to increasing the ethnic and cultural diversity on UK company boards. In 2017, Sir John Parker recommended that each FTSE 100 board should have at least one director of colour by 2021, each FTSE 250 board should have one by 2024 and that companies should develop internal mechanisms to promote diversity (see our corporate update 2017/21).

The key findings of the 2021 update report are:

• 74 FTSE 100 companies had ethnic representation on their boards as at 2 November 2020 (the cut-off date for the survey), compared to 52 in January 2020 (and by March 2021, a further seven FTSE 100 companies confirmed that they had appointed a director from a minority ethnic group);
• 21 FTSE 100 companies who completed the survey had no ethnic representation on their boards as at November 2020 (three further companies did not submit responses and two were unable to provide the information);
• 124 out of 998 board positions in the companies that responded are held by 118 ethnic minority directors (12%), compared to 95 directors in 2020 (8%); and
• only five ethnic minority directors occupy a CEO position, with two individuals in Chair roles and four in CFO roles.