The government-backed Parker Review Committee published its final report on the ethnic diversity of UK boards on 12 October 2017, which contains three key recommendations are as follows:
1. Increase the ethnic diversity of UK boards:
- There should be at least one director of colour on each FTSE 100 board by 2021 and each FTSE 250 board by 2024
- Qualified people of colour should be presented for vacancies when they occur
- Principles applied to ensure equality in gender-based recruitment should be extended to apply to recruiting minority ethnic candidates
2. Develop candidates for the pipeline and plan for succession:
- FTSE 100 and FTSE 250 companies must develop and implement plans to identify and promote people of colour within their organisations. This can include sponsoring and mentoring programmes to ensure that they gain experience and the skills necessary to assume managerial roles
3. Enhance transparency and disclosure:
- Companies should explain in their annual report the board’s policy on diversity
- If a company does not meet board composition requirements by the specified date, they must explain the reasons for this
The Parker Review Committee will remain intact until 2021 at the earliest and will meet at least annually to assess the progress made in relation to its recommendations. Whilst the recommendations are currently voluntary, the Committee has noted that they may become mandatory if there is insufficient progress made towards the goals.
Our Co-Chair Siddhartha Shukla commented, “This is quite an important report and whilst it primarily focusses on FTSE 100 and FTSE 250 companies, I am confident that other companies and organisations in the UK would also be encouraged to implement these recommendations. It is another step in the right direction.”
The final report can be accessed here, and it follows on from the McGregor-Smith Review from earlier this year (see here).