Poor accountability and vanity metrics: the updated Parker Review paints an inaccurate picture of ethnic diversity in the boardroom

Many studies over the years substantiate the economic case for diversity in businesses.

diversity in the boardroom

Many studies over the years substantiate the economic case for diversity in businesses. McKinsey reported a direct correlation between racial and gender diversity in organisations and an increase in innovation and profitability. Gartner likewise revealed that 75% of businesses with diverse decision-making teams will exceed their financial targets. 

Why then aren’t more businesses acting on diversifying their workforce to unlock such profitability? It’s not because such businesses don’t care about being commercially successful; rather, it highlights that the problem is both institutional and cultural. 

The case for gender diversity, catalysed by The United Nations HeForShe movement, has gained global momentum since its inception but the focus on ethnic diversity has paled in comparison.  When it was initially published in 2017, The Parker Review, an independent report led by Sir John Parker, found that the UK’s leading listed companies were not representative of the public it served. To catalyse change, it made a series of targets: “One by 2021” for all FTSE 100 boards to have appointed at least one director from an ethnic minority background by 2021 and a “One by 2024” target for all FTSE 250 boards. 

In subsequent years, the updated reports revealed minimal progress. In 2020, of the companies where the ethnicity of the boards was known, 68 per cent of FTSE 250 organisations had not yet met the target; for FTSE 100 companies, the figure stood at 37 per cent. The updated Parker Review, published recently, paints a more optimistic picture of progress, at least, at surface level. Nearly all (96) of the FTSE 100 companies reported having appointed at least one ethnic minority director (up from 89 the previous year) with 49 companies having appointed more than one to their boards. David Taylor, chair of the review committee, said the targets have “effectively” been met (albeit a year late), so what’s next? 

Unfortunately, The Parker Review’s accounting doesn’t quite tally up with the picture of progress it’s projecting. A number of directors from ethnic minority backgrounds accounted for in this census hold non-executive director posts, many of whom sit on more than one board and are therefore counted several times. Also, the grouping of all ethnic minority directors under the catch-all BAME banner glosses over the pervasive inequities that lie at the heart of the grouping itself. Nuances simply aren’t accounted for through this reductionist lens. 

Black talent remains the most disadvantaged ethnic group of all. Until this is acknowledged and the BAME categorisation overhauled, these easily manipulatable figures distort a much uglier picture. The concern is that if diversity targets have been “effectively” hit as this year’s update suggests, the subtext is that the job is now “done”.

The trouble is that diversity itself is seen as a ‘problem’ not a solution – a nice-to-have ESG policy when it should be baked into a business growth strategy. The systems by which companies are made accountable for ethnic diversity appointments must be mandatory. If that can’t be done, then a certification process, much like the BCorp model, where organisations are awarded for making and honouring sustainable commitments aimed at removing inequality, must be established across industries to discourage corporate blackwashing. 

Organisations must also work hard towards eliminating bias from their systems; from how candidates are recruited to how they are supported, mentored and upskilled throughout the course of their career, addressing the talent pipeline so that diversity, at an organisation’s core, becomes sustainable. 

A diversity strategy must always have an eye on the bigger picture, mindful of both the micro and macro influences at play that perpetuate inequality both inside and outside an institution and industry. Businesses themselves must think about how they can be vital agents for change by taking responsibility for the part they play in maintaining the status quo, consciously breaking away from engrained systems and engineering a better way to seek, recruit and nurture talent. Such a big job cannot be done in silo. Radical reformation requires forming alliances with schools, educators, recruiters, local authorities, relevant charity organisations and other organisations.

Meanwhile, we must not hoodwink ourselves into thinking that positive, impactful change in diversity at the upper echelons of the country’s leading businesses has finally been achieved; that they have, at last, got diversity ‘done’. The job is far more complex than a census might suggest. In truth, we have barely scratched the surface. 

Denise Myers
Denise Myers

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