The UK’s biggest companies are making steady progress on board diversity, with women now occupying more than a third of board roles and first-time ethnic minority appointments rising to 25%.
Executive search firm Spencer Stuart found that the largest 150 companies in the FTSE rankings have heeded the call to boost diversity on their boards, but more work needs to be done to achieve equity.
In the past year, the proportion of first-time board directors from minority ethnic backgrounds rose from 17% to 25% and the proportion of women in board positions increased from 34% to 36%.
However, companies are still a way off the “one by 2021” ethnic diversity target set by the Parker review. Just 61 of FTSE 100 boards had reached this level as of 30 April.
“The tragic events surrounding the death of George Floyd during the summer of 2020 rightly fired a rocket under efforts to boost minority ethnic representation, and boards are now walking the talk. Diversity, equity and inclusion has become a key defining topic of conversation across society, and thankfully now at the very top of UK plc too,” said Spencer Stuart UK managing partner Shami Iqbal.
“The encouraging rise in the proportion of first-time directors from minority ethnic backgrounds is representative of a concerted effort to look harder and become more creative to bring to light this talent from a much broader pool. But this is not ‘job done’: there is a huge amount of work for us all to do.”
While progress had been made on gender balance on boards, this did not translate into executive positions. Men still make up 86% of all executive directors and men still hold all four senior board positions (chair, senior independent director, CEO and CFO) in 64 of the top 150 companies.
Only 8% of CEOs are female, an increase of just three percentage points over the past decade.
Tessa Bamford, who leads Spencer Stuart’s board and CEO practice, said: “There is no denying the growth in female representation on boards in the past decade, but progress is limited to non-executive directors – the number of female executives in the boardroom and on executive committees remains very low.
“There is also a significant lack of female directors in senior board positions. Companies must continue to focus their efforts on developing the pipeline of female talent within the executive ranks and to have more women with P&L experience.”
The 2021 UK Spencer Stuart Board Index also finds that:
- 11% of board directors identify as an ethnic minority
- 61% of boards have at least one ethnic minority director
- 51% of non-executive directors are women
- 15 boards in the 150 largest listed companies comprise 50% or more women.
The report praises Lloyds Banking Group for going beyond what is proposed by the Parker Review and the Hampton-Alexander Review in the data it reports. The company discloses the gender and ethnicity of board members and senior managers, as well as disability, gender identity and sexual orientation across all colleagues.