HR & Management

Diversity in FTSE 100 company boardrooms declining

4 min read

24 June 2015

The proportion of non-white managers in 7,700 positions below the boardroom level of FTSE 100 companies has fallen to 5.7 per cent from 6.2 per cent a year ago, a new study has found.

In its 2011 report of the same nature, Green Park unveiled that 87 per cent of the population had described themselves as being white.

The research indicated that companies are getting less ethnically diverse, with Green Park CEO Raj Tulsiani warning that a “diversity deficit” could put the UK’s global competitiveness at risk.

He added that FTSE 100 had lost almost 40 of approximately 480 non-white leaders, and that the situation would likely to continue to worsen rather than improve in the future. 

It was revealed that 62 per cent of FTSE 100 companies have all-white boards. This is, according to Tulsiani, despite a campaign that had been launched by the former business secretary Vince Cable to encourage companies to ensure they recruit at least one non-white director by 2020. It is not clear if the new government intends to adopt this policy. 

The research did not find an executive director of Chinese or east Asian heritage. Tulsiani suggested it was an astonishing concept given that China, Korea, Indonesia and Japan were some of the biggest and fastest growing markets. 

What was “even more startling”, he claimed, was that there are fewer than 60 Chinese or those of East Asian descent in the entire 10,000 top leaders.

“We know that this group forms the single most successful educational demographic in the UK, and has done for quite some while, so big companies need to ask themselves, why are they not drawing on this group’s talent and insights to help provide a competitive edge in targeting important markets for growth?” the report said.

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Meanwhile, the contributions of east Asian entrepreneurs in the UK tech scene were championed by UK minister Vaizey. The Top 100 Asian Stars list in UK Tech revealed digital influencers such as Dame Zarine Kharas, the CEO of Justgiving.com as well as Bindi Karia, vice president of Silicon Valley Bank, Reshma Sohoni, CEO of Seedcamp and Nikhil Shah, co-founder of MixCloud.

Previous winners had included chairman of Startup Loans, James Caan, as well as Samir Desai, founder of Funding Circle. 

The FTSE 100 recently saw the departure of Tidjane Thiam as CEO of Prudential, and the ejection of oil services firms Petrofac and Amec from the index helped decrease the figures.

Green Park also took a look at gender diversity in the boardroom, and found an increase in the number of female chairs in the FTSE 100. This has gone from one to three as Susan Kilsby of pharmaceutical company Shire and Sarah Bates of wealth management firm St James’s Place join Alison Carnwath from Land Securities. The number of female chief executives has also increased from four to five.

Overall, the number of women on FTSE boards has increased, however, Green Park stated: “Women and minority leaders continue to feature disproportionately as non-executive board directors; as a consequence, their true level of influence is far smaller than their numbers suggest.”

Trevor Phillips, chair of Green Park diversity analytics claimed that the drive for diversity in Britain’s top companies is in danger of becoming a euphemism for more seats for professional white women at board tables. He said that it has become clear that Britain is “going nowhere” when it comes to improving social mobility and going backwards on ethnic diversity.