The Parker Review is an independent review led by Sir John Parker, which considers how to improve the ethnic and cultural diversity of UK boards to better reflect their employee base and the communities they serve. This 2021 report (PDF) marks a significant point because we have now reached the expiry date of one of the review’s key targets: that each FTSE 100 board should have at least one director from a minority ethnic group by the end of 2021.
The good news is that the target has nearly been met. By the end of 2021, 89 FTSE 100 companies had at least one director from an ethnic minority group, plus an additional five appointments announced since then. Furthermore, three companies are at the advanced stages in recruitment processes. In addition, the Parker Review set a target for FTSE 250 companies to have a minority ethnic group director on their boards by December 2024. Good progress has also been made here, particularly over the last two years, with 55% already meeting the target.
Behind the headlines
Despite the progress, there is no room for complacency. Although having at least one ethnic minority group board member acts as a highly visible and powerful statement, there is still much work to be done to address the issue of diversity within organisations and more broadly, in the business world. As explained in the report (PDF), there are nuances behind the headline figure. For example, the majority of minority ethnic group directors are currently in Non-Executive Director (NED) roles rather than executive positions. There are also questions over how many directors from ethnic minority groups have been recruited from outside the organisation, rather than appointed as a result of succession planning within companies.
The ultimate aim is for everyone — whatever their ethnicity or level within an organisation — to have equal access to successful careers. To support this journey, this year’s report includes a Directors’ Resource Toolkit (PDF) developed by the UK National Equality Standard team. Based on insights from over 400 organisations, the toolkit offers advice on changing organisational culture, improving talent processes and using data to create a more inclusive workplace.
Why board diversity matters
EY has sponsored the Parker Review since its inception in 2015. We believe that it is important for companies to increase the ethnic diversity of their boards so that they are more representative of society. By doing so, boards are not only well placed to make better decisions but also to deliver greater value to a wider range of stakeholders.
With businesses increasingly held to account by their stakeholders, it has never been more important for companies to take concrete actions to foster diversity, equality and inclusive growth. Every business needs to make an active effort to bring diverse talent through its ranks, create opportunities, and directly address the barriers to recruitment and progression which have historically led to inequitable workplaces. In the boardroom — where the most important strategic judgements are made — having a diverse range of opinions and experiences — from different backgrounds — is the best way to make the right decisions, manage and mitigate risks, and ultimately, create value for all stakeholders.
Read more on their website.