The Parker Review Committee has published its final report into the ethnic diversity of UK boards. The final recommendations are substantively the same as those published in a 2016 consultation draft. The final report recommends that there should be at least one director of colour on each FTSE 100 board by 2021 and each FTSE 250 board by 2024. There are also recommendations on ensuring the pipeline, executive search principles, and that commentary on a company’s efforts to increase ethnic diversity within its organisation, including at board level, should be included in the description of the company’s diversity policy set out in the annual report. Companies that do not meet the board composition recommendations by the relevant date should disclose why this is the case.
The Committee will remain intact at least until 2021 and meet at least annually to assess progress. If insufficient progress is made voluntarily, the Committee may revise its approach and endorse that the recommendations (or relevant parts of them) become mandatory.
On 9 November the Hampton-Alexander Review published a supplementary report on gender balance in FTSE leadership. This concludes that a step change in pace is needed in order to achieve the targets set for FTSE350 leadership roles.
BEIS has now published an updated Voluntary Code for executive search firms; this has been expanded in light of the Parker Report to address ethnic diversity and cover senior executive as well as board roles. It includes a new recommendation that search firms should support organisations in developing targets for enhancing diversity in senior executive roles and in developing plans to strengthen the pipeline of diverse candidates.