Business in the Community report notes ‘virtually no ethnicity change’ at top of UK firms and calls for new corporate code
The government is being called on to launch a review into barriers that seem to prevent people from ethnic minorities from landing the best jobs in business, after a survey revealed that little progress has been made on tackling inequality in top British management.
Business in the Community (BITC), the charity that wrote the report, also called for ethnicity to be added to the UK corporate governance code, which sets out standards of good practice and states: “The search for board candidates should be conducted, and appointments made, on merit, against objective criteria and with due regard for the benefits of diversity on the board, including gender.”
The survey, using data from the Office for National Statistics, found that only 6% of top management positions and 7.9% of management positions were held by black, Asian and minority ethnic (BAME) people in 2012, compared with 10% in total employment in the UK.
The management figures have edged up from 5.5% and 6.8% respectively since 2007.
Her report added: “There has been virtually no ethnicity change at the top of UK establishments since our last report five years ago … On the face of it, the proportionality does not look too extreme, yet the plain truth is that for BAME people, the gap between their share of the UK employed population and of management positions has widened in every single year since 2004.”
Davies’s review into gender equality was launched in February 2011 and its target was to have 25% of FTSE-100 board directors as female from this year. At the time, only 12.5% of FTSE-100 directors were women, but when the committee last reported, that figure had risen to 21.6% and the campaign has been widely viewed as an example in which a voluntary code can produce results.
However, while Davies has caused gender diversity in top corporate roles to receive a higher profile, ethnicity has received less attention, although the business secretary, Vince Cable, accused the UK’s top companies in March of neglecting racial diversity in their boardrooms and urged them to use a wider talent pool when making senior appointments.
Even so, the Department for Business, Innovation & Skills is understood not to be considering a Davies review for race, partly because of the limited time left in this parliament and also because the gender of FTSE-100 directors is far easier to measure than their ethnicity.
The BITC research added that the share of BAME people in top management had risen by just 0.5% between 2007 and 2012, but during that time the number of BAME people in top management positions had fallen from 95,023 to 73,378. There have also been drops in management positions held by BAME people in the east Midlands, the north-east and Yorkshire and Humber.
The research follows a related study published earlier this year by Trevor Phillips, former equalities commission chairman, and Richard Webber, of King’s College London, which stated that more than half of FTSE-100 companies have no non-white directors and two-thirds have no full-time minority executives at board level.