UK FTSE companies fail in ethnic minority directors inclusion
Last updated on December 3rd, 2018
As per a strategic review Sir John Parker, the chairman of the mining company Anglo American on progress of UK companies qualitatively and substantively, the total number of FTSE 100 company directors from ethnic minority has witnessed decline as compared to past year.
As per the data disclosed only “84 of the 1,048 director positions in the 100 biggest companies on the London Stock Exchange are held by a business leader from an ethnic minority appose to 85 last year”. The data intensified the concerns about making big companies more representative throughout the country.
The review was the first annual update on the evaluating the achievement of the target set for FTSE 100 to appoint at least one board level director from ethnic background by 2021 and as of now the numbers do not speak a favourable story as majority of FTSE boardrooms witness absence of even board director from an ethnic minority background that too over the long duration of 51 years.
The review was apparently a government-backed campaign to boost boardroom diversity. The data was published a day after Theresa May revealed her plans that had the will lead to revelation of their race pay gap statistics in order to ensure that companies obliged to publish the pay gaps between men and women.
The move is consequence of the consistent pressure to bring in corporate governance reforms. The trend has taken over the decade given the rising mistrust on top companies after the last financial crisis which resulted majorly due to inequality, the imposition of austerity, and several corporate scandals, including collapse of Carillion.
Going by average records, 8% of the directors of top firms are from ethnic minorities but UK citizens despite being 14% of the total population are only 2 %. As expressed by Parker what is needed for UK corporate sector is an immediate address to the issue. As he said “We’ve got to make real progress. The purpose of this update is really to alert again, and to make business leaders even more conscious they need to step up,”
Though Theresa May has taken up to the reform path, her reform agenda is under severe criticism from Labour, which has called for a far more radical overhaul of Britain’s corporate environment. They believe that such changes are concrete and will not have major changes in the system. Instead they are pushing for more strong changes such as putting workers on boards and forcing the transfer of company shares to workers.
Apart from the ethnic representation the gender representation also caught the attention. As per records, FTSE 100 boards are majorly male dominated with few exceptions.
As per observation, Land Securities and Hargreaves Lansdown are among the few firms with a female chair, while bosses from ethnic minority backgrounds include the Diageo chief executive, Ivan Menezes, the Barclays finance director, Tushar Morzaria, and Shriti Vadera, who sits on the board at BHP Billiton and is chair of Santander UK.
The Parker review followed Hampton-Alexander review and Standard Chartered chief executive Mervyn Davies have all advocated to boost the representation of women on boards.
Though there has been increase the number of women on boards but as per study conducted by Cranfield University there has been a sharp decrements in number of women working on top posts.
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