The 2022 Parker Review Report published in March 2023 showed progress in increasing ethnic minority representation in the boards of the FTSE100 and FTSE250 companies.
The Review also announced two new changes to its remit going forward; a widening to include targets for ExCo and ExCo minus-one pipeline, and an expansion to include 50 of the UK’s largest private businesses.
Here’s our analysis of progress made so far and some reflections from David Tyler, Chair of the Parker Review, and Sir Trevor Phillips, broadcaster, business leader, and member of the Review Committee.
The Parker Review 2022 Summary
The 2022 Parker Review has revealed that progress has been made by the FTSE350 over the last year. The update revealed that 149 of the FTSE250 had at least one ethnic minority director, up from 128 last year. And across the FTSE350 there are now 11 ethnic minority directors who occupy positions of Chair, 21 who are CEOs and 19 who are CFOs.
Data from their latest census also showed that as of December 2022, 96 of the FTSE 100 had at least one ethnic minority director and half had more than one. In 2016, only 47% of FTSE 100 boards had at least ethnic minority director.
Trevor Phillips commented,
‘One thing I’ve learned is that the numbers matter, and data can make a difference. Diversity and inclusion is just another business problem that has to be dealt with and where the results can be counted.’
New targets – looking forward
Looking forward, FTSE350 companies have been asked to set a percentage target by the end of 2023 for senior management positions that will be occupied by ethnic minority executives by December 2027.
Fifty of the UK’s largest private companies have been set the target of having at least one ethnic minority director on the main board by December 2027. You can find out more about who they are here on page 16 of the Parker Review Report.
Each private company has also been asked to set their own targets for the percentage of ethnic minority executives within their board and also their senior management team; the target should be published by December 2024 and achieved by December 2027.
In announcing these new changes David Tyler, Chair of the Review said,
‘We believe that if ethnic minorities have equal opportunities to succeed in business, the corporate world will be assisting our wider society to be more cohesive – so there’s a compelling reason to set targets within large private companies.'
Change the Race Ratio welcomes the update and widening in scope from the Review. It is essential to make sure that we have ethnic minority representation at board, exco and exco minus one level. The business case is sound. Consulting firms McKinsey and Deloitte have clear evidence that diverse teams result in more profitable and innovative organisations.
Change the Race Ratio and the Parker Review
We are proud to partner with the Parker Review to accelerate increased ethnic minority representation in company boardrooms and leadership teams.
Change the Race Ratio champions the Parker Review and since 2020 has developed momentum towards real and lasting change for ethnic minority representation both on boards and executive committees.
The goal of leadership racial equity could be reached by 2027 - or sooner if business leaders act on the Parker Review’s targets for ethnic minority representation, on boards and leadership teams.
But diversity is more than a boardroom issue – it's about workplace culture too. Companies need to ensure that they’re taking action across every part of their business to create an inclusive culture that promotes a sense of belonging for everyone.
About Change the Race Ratio
At Change the Race Ratio, we also ask signatory businesses to commit to setting and publishing targets for exco and exco minus one. So we’re proud to see our signatories leading the way in committing to creating more equitable leadership teams and workplaces.
When we launched Change the Race Ratio in 2020, we wanted to provide business leaders with a platform and community to help them achieve the Parker Review recommendations for increasing board diversity.
FTSE350 companies are now stepping up the pace to ensure that people from ethnic minority backgrounds are strongly represented in business leadership.
There is no excuse for businesses not to be more ambitious on ethnic diversity targets at the top. We ask all businesses who are considering what steps to take after the 2022 Review to sign up to Change the Race Ratio.