The business case laid out in the Parker Review is clear; improving diversity enables a company to reflect their stakeholders, achieve better business outcomes and enable overall positive change. In times of economic uncertainty, when budgets are being cut and profit margins falling, equity must remain a business priority so as to ensure long term success.
The findings show that we are moving in the right direction when it comes to representation of ethnic minorities at a senior level. But it also highlights some clear imbalances that require urgent focus and effort. In particular, when the data is broken down by ethnicity, the picture shows that Black talent lies far behind other minorities and a considerable way away from matching population demographics.
In fact, the dial for Black professionals is moving backwards and this must be addressed as a priority. Whilst the number of Asian directors in the FTSE 100 increased a little, from 55% in 2022 to 56% in 2023, Black directors decreased from 17% to 16% in 2023. The Review also reveals that almost a third of the FTSE 250 do not have a director from any ethnic minority background.
Research from the Black Talent Charter in collaboration with Bain & Company, has shown that the finance and the professional sectors currently employ less than half the percentage (2%) of the Black British working population (4.4%). At senior leadership, fewer than 1% in the financial and professional services are Black. Significantly, the proportion falls to just 0.5% for leadership in investment banks and 0.4% of equity partners in non-law professional services firms. Our research shows that, if the current pace of progress continues, it will take approximately 70 years before Black talent is proportionately represented in business.
Businesses must address their pipelines in order to get the best talent through to senior levels. The Parker Review notes that 120 of the 211 minority ethnic directors in the FTSE 250 were recorded as a UK citizen (57%). This progress on ethnic diversity is something to celebrate and strengthens British business, but it also highlights a gap. British minority ethnic directors held just 8% of the 1,701 total director positions in the FTSE 250. A push to find, develop and nurture British Black talent is needed.
A collaborative approach is key so that best practice can be used to hit and surpass targets. The Black Talent Charter exists to facilitate this collaborative approach across UK businesses enabling those who are successfully changing to share best practice with those who are currently failing to achieve equity. Businesses can only address failings once they understand the barriers to progression and we look forward to working with those committed to making race equity a priority through 2024.
You can find read the full 2024 Parker Review here.
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