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Efforts by UK companies to diversify their boards have stalled, with fewer ethnic minority directors appointed in 2024 and women still struggling to reach senior roles such as chair and chief executive New data shows that this is true.
Headhunter Spencer Stewart, who carried out the research, said some companies risked “resting on their laurels” after achieving minimum minority representation targets.
Chris Gaunt, head of board affairs at Spencer Stuart, said: “One of the reasons why diversity promotions are declining or stagnating is that so many companies are overshooting or underachieving the goals they set. “It’s something we’re doing,” he said.
The Parker Review has set a target for all FTSE 100 companies to have at least one director from an ethnic minority background on their boards by December 2021, resulting in 96 of the FTSE 100 companies meeting this requirement. I achieved my goal.
The board of the mid-cap FTSE 250 index has been given a deadline to achieve a similar target by the end of this month.
Of the 50 FTSE 250 companies in Spencer Stewart’s sample, only three still do not meet the requirements. However, only 12.5% of all directors are from ethnic minorities, the study found.
“We don’t want to rest on our laurels and have a ‘one-and-done’ mentality,” Gaunt said.
The annual review considered the top 150 FTSE companies by market capitalization as at 30 April 2024.
Of the 196 directors appointed in the 12 months to the end of April, just 4 per cent were identified as being from an ethnic minority background, compared with 15 per cent last year. This is the first decline since Spencer Stewart began tracking this data in 2019.
Headhunters and boardroom consultants argue that despite recent concerted efforts to promote diversity, boardrooms seeking experienced talent to weather economic and political turmoil are struggling to find a way to move forward with these initiatives. It states that there is a risk of delaying the
Gaunt said there is a connection between the “flight to experience” and the decline in diverse appointments on boardrooms. “If the requirement or specification for a new appointment is a certain type of experience, this is going to be a self-limiting pool by definition,” he said.
The proportion of women in board roles rose from 40% to 43%, with two-thirds of boards having at least one woman in four senior roles: chair, senior independent director, chief executive officer and chief financial officer. He has a woman.
However, 67% of newly appointed senior female executives were in senior independent director roles. Headhunters hope the appointments will serve as a stepping stone for these women to take up chair positions in the future. Of the 150 companies surveyed, 113 had a male CEO and chairman.
Mr Spencer Stuart also noted that the proportion of appointees over the age of 50 on UK boards is increasing. It warned that this could impact companies’ ability to anticipate new consumer trends and address generational disparities in the workplace and technological advances such as AI.
The proportion of new non-executive director appointments under the age of 50 has fallen over the past three years to 6% in 2024, with 94% of board members aged 50 or older.
