Turning words into action in boardroom diversity

by Sofia Garré
Diverse Britain

In her first speech as Vice-President-elect of the United States, Kamala Harris announced that while she may be the first woman in that office, she will not be the last. 2020 has heightened business awareness of the need for real improvements in diversity and inclusion. Most global businesses claim that they will do more to promote diversity in 2021.

With increased activism in the aftermath of the Black Lives Matter protests and demands for change from their customers and their employees, companies released statements, signed pledges and launched campaigns recommitting their support to the diversity and inclusion agenda, reflecting public desire for business leaders to speak out on social and political issues, which rose from 62% to 68% in 2020.1

Of course, diversity and inclusion has been on the corporate agenda for some time. The proportion of UK business leaders agreeing that they actively promote and champion diversity has increased steadily since 2016, with nearly all FTSE 500 Board members surveyed in Ipsos MORI’s long-running Captains of Industry research now agreeing (97% in 2020, up from 86% in 2016).

Close up african businessman shaking hands with client

A steady increase in the proportion of ‘Captains’ agreeing they actively promote and champion diversity

We actively promote and champion diversity and inclusion in our company 

% agree or strongly agree

 

Source
Ipsos Captains of Industry 

Base
British participants from the Top 500 companies by turnover and the top 100 by capital employed in the UK. (99); Interviewed by telephone/video conferencing Feb – July 2020

Black woman laughing with white woman

A growing body of evidence indicates that companies managed by a diverse leadership team tend to perform better than their less-diverse competitors. Organisations in the top quartile for leadership ethnicity diversity are found to have an advantage of 36% when it comes to their likelihood to outperform their peers in lower quartiles.2

So, a growing proportion of the UK’s largest companies are taking positive steps to achieve a more ethnically diverse board and leadership team. Two-thirds agree that they are actively trying to increase the representation of ethnic minorities on their main board, an increase of 17 percentage points since 2018.3 Furthermore, half of the 44 FTSE companies surveyed as part of the McKenzie-Delis Packer Review (a study conducted by DIAL Global with the support of Ipsos MORI) have stated initiatives for increasing ethnic diversity within their Leadership Team, and 57% of them specify diversity in their leadership team’s succession planning.4

Evidence indicates that companies managed by a diverse leadership team tend to perform better than their less-diverse competitors

Two-thirds of ‘Captains’ agree they are trying to increase the representation of ethnic minorities on their board

My company is actively trying to increase the representation of ethnic minorities on our main board

% agree or strongly agree

Source
Ipsos Captains of Industry

Base
British participants from the Top 500 companies by turnover and the top 100 by capital employed in the UK. (99); Interviewed by telephone/video conferencing Feb – July 2020

Can 2020, the ‘unprecedented’ year, finally bring about the change needed to achieve board diversity targets? Despite positive steps and mounting public interest in the matter, progress remains glacially slow. The 2020 Parker Review on board ethnic diversity indicates there is much to do, with just four in ten of the FTSE 350 companies surveyed having at least one Director from an ethnic minority on their board.5

We can only hope that change will happen, driven not by regulations and governments, but by companies’ most important stakeholders – their current staff and the talented people they hope to attract in the future.

Despite positive steps, progress remains glacially slow

Sofia Garré

Sofia Garré

Graduate Research Executive