Britain’s Widening Diversity Deficit In The FTSE 100 Threatens Competitiveness

(3BL Media/Justmeans) – Ethnic minority representation at the top of Britain’s biggest firms has declined, says a study of the top 10,000 executives in the FTSE 100, though on a positive note, gender diversity in the boardroom has increased and women have taken strides forward. The research by Green Park Group, a London-based executive recruiter, warns that Britain’s “widening diversity deficit” is threatening its competitiveness, putting U.K. companies at a disadvantage when doing international business. The report shows that 62 FTSE 100 companies had all-white main boards, up from 61 last year. This analysis by Green Park Group is by gender and ethno-cultural background, derived from unique software designed by Professor Richard Webber, best known as the lead developer of two of the most commonly used consumer classification systems in the world, Mosaic and Acorn.

Those from ethnic minority backgrounds are disproportionately found in non-executive roles. As a result, 70 FTSE 100 ‘leadership boards’ (made up of board and other top-level executive directors) are also all white. Most worrying is Green Park's warning that the talent 'pipeline' of junior ethnic minority leaders is drying up; it's not just a problem at the top-tier. Unless companies take action to increase the chances of ethnic minorities says Green Park, too many of Britain's boards could remain white. Trevor Phillips, former chair of the Equalities and Human Rights Commission and chair of Green Park Diversity Analytics has been reported in the media to say, “This research reveals that the drive for diversity in Britain’s top companies is in danger of becoming a euphemism for more seats for professional white women at board tables.”

The number of ethnic minority chief executives has fallen by a third in the past year, from six to four. The remaining four are Diageo’s Ivan Menezes, Reckitt Benckiser’s Rakesh Kapoor, Carnival’s Arnold Donald and Said Darwazah of Hikma Pharmaceuticals, which joined the index this year. The report highlights that there are no ethnic Chinese or Asian executive directors in the FTSE 100, despite the growing importance of Asian economies as trading partners. Raj Tulsiani, CEO of Green Park Group, says, “We know that this group forms the single most successful educational demographic in the U.K. and has for quite some while, so big companies need to ask themselves, ‘why are they not drawing on this group’s talent and insights to help provide a competitive edge in targeting important markets for growth?’”

This decline in the number of managers being groomed for boardroom seats has occurred despite a campaign by former Business Secretary Vince Cable to encourage companies to recruit at least one non-white director by 2020. It is not clear if the new government intends to adopt this policy. It would be shortsighted not to, as the drive for board diversity is a worldwide phenomenon.

The case for expanding diversity is familiar: to draw on the full range of the best available talent to oversee, govern and advise companies in an era of startling change and unprecedented challenges. Diversity is key to making boards more attuned, more broadly capable and consistently effective than ever before.

Photo Credit: Clagnut on Flickr

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