Data: How the FTSE 100 is failing on boardroom diversity

Recruitment consultancy Green Park’s Annual Business Leaders Index for 2021 shows that despite some progress being made by FTSE 100 companies on diversity in the last year, there is still plenty more work to be done. 

The survey, which examined the backgrounds of 6,245 individuals, found that there are currently just 11 ethnic minority chairs, chief executives and chief financial officers across the leadership teams of the UK’s FTSE 100 companies, an increase of one since 2014.

More starkly, it found there are currently no black chairs, CEOs or CFOs in post at a FTSE 100 organisation.

While Green Park acknowledged that increased attention to diversity in the past five years has resulted in visible changes across organisations, there was also some “corporate sidelining” of female and ethnic minority leaders. 

At board and executive committee level, Green Park noted a stronger representation, with an addition of 107 ethnic minority leaders over eight years. Despite this growth, 33 FTSE 100 organisations have no non-white representatives on their boards.

Black executive director representation also remains unchanged at 0.6%.

These leaders typically hold roles that are less likely to lead to a promotion to C-Suite roles in departments such as HR, diversity and marketing and communications. According to the report, HR is dominated by women, with a female representation of 71.1%.

Green Park also states that 8.2% of CEOs included in the report are women. Overall, women now fill 12.2% of the top 3 C-Suite roles, occupying 36 positions. This marks an increase of 23 women occupying C-Suite roles in the past 7 years. It also noted that female board members are almost twice as likely to be non-executive directors compared to executive directors.

Retail in focus

Retail was one of only two sectors this year who recorded a decrease in gender diversity at their board and executive committee level. The retail sector saw an overall decrease in female representation at board and executive committee level from 31.9% in 2019 to 31% in 2021. Ethnic diversity rose at this level across the retail sector but remained low, rising from 5% in 2019 to 7.1% this year.

Across the Top 40 level, which Green Park defines as senior leaders who report to the board and executive committee, retail is the second-most gender diverse sector after the media sector, with 35.1% female representation. Concurrently, retail ranks as the second least ethnically diverse sector across this same level, with 5.5% representation.

A further analysis of retail leadership reveals the ethnic diversity breakdown of the sector. 0.3% of those in senior leadership roles in retail are black. 1.8% are Chinese or from other Asian countries, while 2.9% are Hindu or Sikh. 0.5% of those included in the report are Muslim.

Green Park chair Trevor Phillips said: “The attention to diversity over the past five years is paying some dividends. We are seeing changes in the composition of the top tier of corporate Britain – though it’s patchy.”

”Some of the improvement comes from the expansion in the numbers of certain roles – research, digital leaders, and the prevalence of some groups in specific functions such as finance. But the prospects of more diverse top leadership overall – especially amongst chairs and chief executives – are blighted by the fact that in most FTSE companies, women and minorities are concentrated in the corporate sidelines rather than getting a crack at the fast lane to the top.”  

Recommendations

The report also outlines how companies can improve their own diversity from the inside. Green Park advises that organisations do more than use hashtags such as #MeToo or #BlackLivesMatter to illustrate that they support diversity and inclusion.

It also recommends collecting diversity data, reporting on pay gaps, monitoring rates of retention, attrition, promotion and job satisfaction and setting targets: “To make a real difference, targets should be tied to executive-level compensation with bonuses for company chairs and senior independent directors tied to meeting pay gap targets and upholding diversity and inclusion policies that protect the organisations’ staff, customers and brand.” 

Further recommendations include appointing a chief diversity officer and demanding diverse candidates. 

CEO and co-founder Raj Tulsiani said: “Considering our economic and political positioning post-Brexit and soon-to-be post-pandemic, British business cannot afford to lose its best talents to its global competitors or be complacent in the pursuit of the insight and innovation gained through different perspectives and lived experience.”