Nearly a third of public bodies have failed to fulfil race equality duties imposed on them by the Race Relations Amendment Act (2000) (RRAA).
Research by the Commission for Racial Equality (CRE), based on a survey of 3,338 public authorities and educational institutions, shows that 30 per cent of public authorities have failed to set targets for improving race equality.
Under the RRAA, public bodies have a duty to make improvements on race equality across their organisation.
The study also finds that one in 10 of the organisations surveyed have done nothing to comply with the law.
Just one-third of the UK's public bodies are leading the way with focused action.
Trevor Phillips, chair of the CRE, said the survey was an important wake-up call for public bodies.
"Now we have the numbers we can talk about what is really happening," he said. "We can tell [public bodies] how to do it properly - then we will concentrate on the bad guys."
Keith Handley, vice-president for diversity at the Chartered Institute of Personnel and Development, hoped plans to create a single equality body responsible for promoting diversity would help employers meet their duties under the RRAA.
Elaine Way, president of the Association of Healthcare Human Resource Management, welcomed the positive results highlighted in the health sector where 83 per cent of respondents said they had a race equality scheme in place.
"A significant percentage of employees in the NHS are taking the job seriously. There is no room for complacency but a large proportion of people are promoting the duty," she said.