CBI: FTSE 100 to have at least one BAME board member by 2021

The Confederation of British industry (CBI) has called for UK firms to have at least one Black, Asian, or minority ethnic (BAME) member on their boards by 2021. Urging companies to publish tougher targets, the CBI’s new President Lord Karan Bilimoria is calling for FTSE 100 firms to have at least one racially and ethnically diverse board member by the end of 2021. He wants FTSE 250 firms to achieve the same representation by 2024.

Bilimoria also plans to launch the Change the Race Ratio campaign at the end of this month, which calls on businesses to publish clear targets for greater racial and ethnic diversity at board, executive committee and senior management levels. The campaign aims to increase racial and ethnic participation in British businesses. Firms such as Aviva, BiTC, Brunswick, City Mental Health Alliance, Cranfield University, Deloitte, Linklaters, Microsoft and Russell Reynolds are already backing the campaign. Although it’s not officially being launched until the end of the month, he is inviting companies to sign up now and commit to changing the race ratio through tangible action.

WHY NOW?

Currently a third of FTSE 100 firms do not have ethnic minority representation at board level, despite government recommendations calling for diversity since 2016. In fact, earlier this year, the Parker-Review revealed that FTSE boards would miss the 1 by 2021 ethnic diversity target. “In early in 2020, an update to the Parker review revealed that 37% of FTSE 100 companies do not have any ethnic minority board representation. And 69% of FTSE 250 companies have no ethnic minority representation on their Boards,” pointed out Bilimoria. Despite research McKinsey, providing evidence that boards with racial and ethnic diversity perform better than competitors, many FTSE companies have failed to boost diversity at the top ranks.

Bilimoria believes that if companies don’t take action now, they are in danger of missing the 2021 target. “Progress has been painfully slow,” he pointed out. “The time has come for a concerted campaign on racial and ethnic participation in business leadership.”

THE FOUR COMMITMENTS

The CBI is asking business leaders to take tangible action as set out in its four Commitments to Change (based on the Parker Review findings). They include:

Increase racial and ethnic diversity among Board members.

• FTSE 100 should have least one racially and ethnically diverse Board member by end 2021.
• FTSE 250 should have  at least one racially and ethnically diverse Board member by 2024.

Increase racial and ethnic diversity in senior leadership. 

• Set clear and stretching targets and publish them within 12 months of making this commitment.
• Establish a separate target for black participation at both levels.

Be transparent on actions.

• Publish a clear action plan to achieve the targets and share progress in the Annual Report or company website.
• Disclose ethnicity pay gaps by 2022, at the latest. 

Create an inclusive culture in which talent from all diversities can thrive. 

• Focus on recruitment and talent development processes to drive a more diverse pipeline.
• Ensure data collection and analysis.
• Foster a safe, open and transparent dialogue, with mentoring support and sponsorship.
• Work with a more diverse set of suppliers and partners, including minority-owned businesses.

COLLABORATIVE EFFORT

“Our campaign will foster a community that works together and shares good practice. We know that real change will take time, and a dedicated, concerted and collaborative effort,” added Bilimoria. “We must challenge and inspire each other to push harder and do better.”

Bilimoria is urging leaders to become signatories and commit to Change the Race Ratio ahead of the campaign’s official launch. Email Richard.denetto@cbi.org.uk for more information or to sign up.