The independent Parker Review of ethnic minority representation on the boards of the UK’s largest companies concerns itself annually with how to improve the ethnic and cultural diversity of UK boards to better reflect their employee base and the communities they serve.
The most recent survey, published in March 2022, showed that progress was being made with 89 FTSE 100 companies having ethnic representation on their boards, compared with 74 the previous year. With another five companies announcing at the time of the report that they were to make new ethnic director appointments in 2022 and a further three companies reporting that they were actively engaging in recruitment, the report said: “we are almost there.”
Sir John Parker himself said: “Their [FTSE companies] places UK listed companies at the forefront of global governance, gender and ethnic diversity. This will be a winning combination in a competitive world with fast-changing demographics.”
In recent years a similar review, by Lord Davies (‘Women on Boards Review’) has successfully addressed the numbers of women on boards – around 40% of boards now have female representation.
Why diversity important
Diversity unlocks growth, both in business and society and it’s needed more than ever. It will help bridge the UK’s skills gap and it will help the UK (and the world) to continue to recover after the Covid-19 pandemic, as well as how we in the UK continue to face the continuing challenges around Brexit.
So important is it that in October 2020 in the depths of that Covid crisis, the Confederation of British Industry launched their Change the Race Ratio campaign with four commitments for businesses: to meet the recommendations of the Parker Review; to set and publish targets for minority representation at senior level; to be transparent about plans and targets; and to create an inclusive workplace culture.
Any shift must happen at both the top of business and at the bottom. Board rooms and senior leadership teams need to be more representative to help inspire future generations of talent. To ensure they remain so they need immediately to be building in diversity from the ground up. As CBI president Lord Karan Bilimoria said at the CBI’s 2020 diversity and inclusion conference last year:
“…inclusive workplaces are the right thing to do, but that they are also the best thing to do for
business.”
What it achieves
Working towards greater diversity benefits all involved, including employees, businesses and society as a whole. This should make it a no-brainer for any forward thinking company wanting to do the right thing, while also boosting their bottom line and their reputation.
And recruiting diverse junior talent pays dividends: it’s good for profitability, it boosts creativity and innovation and it builds equality into a business from the ground up which in turn will naturally create diverse representation at board level in years to come.
The business case for diversity is compelling. According to McKinsey’s 2018 study, Delivering Through Diversity, companies in the top-quartile for gender diversity on their executive teams were 21% more likely to have above-average profitability than companies in the fourth quartile. For ethnic and cultural diversity, top-quartile companies were 33% more likely to outperform on profitability. Diversity therefore correlates to financial performance.
With it shown that companies with robust diversity and inclusion policies not only outperform their competitors financially, but also win the war for talent and enjoy a better image, there is really no reason for businesses not to embrace such practices at all levels.
The best companies create communities within their organisation supplying resources to aid support and friendship, while ensuring managers are trained to lead diverse teams. Good organisations make growth and development opportunities transparent and they also factor in mentoring to help with advancement and address individual need. It helps to create a strong sense of belonging in the workplace and people are likely to feel happier, more fulfilled and more likely to contribute at their full potential. The best companies know this and reap the rewards.
By taking Asset Training’s Equality and Diversity training you will understand all the above and more, including current legislation and key principles. You will learn about the benefits of Equality and Diversity in society, in the community and in the workplace and with it you will make a better contribution in all those areas and become a real asset yourself.
Our distance learning course provides a nationally recognised Level 2 qualification and therefore provides evidence of competency and ability to employers. In furthering personal and professional development individuals are able to learn at their own pace and at a time that suits – without having to attend college.