THE BLOG

How Do We Make Britain's Boardrooms More Diverse?

17/12/2014 00:47 GMT | Updated 15/02/2015 10:59 GMT

Data has been published this week announcing that Britain's boardrooms are becoming increasingly white - 69 per cent of FTSE 100 companies currently have no Black, Asian or Minority Ethnic (BAME) people on their executive teams, compared to 62 per cent in February. Meanwhile, the number of BAME FTSE 100 chief executives stands at just four, and 95 per cent of FTSE 100 board directors are white.

These findings reflect our Race at the Top report, published in June this year, which found that although BAME people make up one in ten of the UK workforce, they hold just one in 13 management roles and one in 16 senior leadership positions. What makes this week's figures even more appalling is not just that they are so wildly out of step with the current BAME population, but that the gap is only projected to get wider; by 2051, one in five people in the UK will come from a BAME background. Such a stark lack of BAME people at these senior levels sends a very clear message, particularly to the younger generation: this is not the job for you.

Put simply, the boardrooms of Britain's biggest businesses don't reflect the society they're operating in. And, as the BAME population - and their spending power - increases and organisations are increasingly asked about the make-up of their workforces by clients and contractors, this lack of diversity could potentially have huge impacts on their profits. Therefore, if they're not going to risk being left behind, employers must take action now to increase BAME representation at all levels of their organisation.

In Race at the Top we publically called for government to take action by adding 'and race' to the UK Corporate Governance Code and by conducting a Lord Davies-style review into BAME leadership. We were extremely pleased that in September, the Financial Reporting Council released updates to the UK Corporate Governance Code - with a significant inclusion of 'and race' within the preface to the 2014 Code and for consultation to the 2016 Code. Meanwhile, both the Government and Labour have promised reviews into BAME representation on FTSE 100 boards if they are elected next May. But there is still more that government and employers can do in the meantime - particularly in terms of ensuring that talented BAME candidates are in place to step up when opportunities arise in the C-suite.

We know from our Gender and Race Benchmark 2014 that BAME employees tend to have lower performance ratings during performance reviews than their white counterparts, and that they are less likely to be rated as 'high potential' or put forward for leadership training and development opportunities. This sends out a strong message that current performance and appraisal processes are not working for BAME candidates and employers may need to modernise their approaches to talent spotting to be less traditional.

However, the Benchmark also found that organisations with mandatory unconscious bias training - which helps employees involved in recruitment recognise that they may be unconsciously selecting candidates similar to themselves or who fit their perception of a 'leader' or 'manager - were likely to have a similar rate of both BAME and white candidates at each stage of the hiring process. Monitoring leadership pipelines and performance and appraisal data by ethnicity, making managers and organisational departments accountable for progression of diverse talent, and conducting focus groups and analysing engagement surveys can also help employers identify the barriers their BAME employees face to senior progression and develop solutions.

But these changes need to be driven from the top if they are to have any lasting impact. That's why we need systemic changes, led by senior leaders and reinforced by managers, to create strong talent pipelines, give talented employees the right skills for future leadership roles, and provide opportunities for sponsorship and mentoring. This change will not happen overnight, but it's vital that employers act now to make the most of all their people - including their BAME talent - place the right people in the right roles at all levels, and enable themselves to compete in a rapidly changing and globalised business environment.