Investors are calling on FTSE 100 firms to report on the ethnic make-up of their boards as they are “falling short of expectations” in terms of transparency.
According to a statement from the Investment Association (IA), investors are asking companies to include information on the ethnic diversity of members of boards as this lack of information is preventing investors from holding companies to account.
FTSE 100 boards are expected to have at least one director from an ethnic minority background by 2021 under the UK government-sponsored Parker Review. The IA said investors want to see not only whether they meet the Parker Review targets but also disclose the percentage of the board that comes from an ethnic minority background.
Chris Cummings (pictured), chief executive of the IA, said: “FTSE 100 firms are falling far short of investors’ expectations when it comes to reporting the ethnic diversity of their boards. The Parker Review from earlier this year showed there is still significant progress to be made on improving the ethnic diversity of UK PLC boards and investors need more information to assess a company’s journey to meeting the Parker Review target. Transparency is key.”
Cummings also noted firms had made “good progress” on increasing the number of women on boards with the FTSE 350 now meeting the 33% gender diversity target set by the Hampton-Alexander Review in aggregate. He added firms have been able to keep up pressure on companies still falling short and have urged them to take action now.
See also: – Improving diversity; improving returns
“We’ve seen good progress on gender diversity when companies have held up the mirror to themselves and listened to investors’ concerns,” Cummings said. “Companies now need to take urgent action and report on ethnic diversity on their boards. Those who fail to do so will find themselves under investors’ spotlight.”
Yesterday, #talkaboutblack and Investment20/20 announced the launch of a joint mentoring programme pairing 16 senior investment management leaders with 16 senior black professionals. This is hoped will encourage more senior black professionals into the c-suite of firms.