Executive Briefing: The Parker Review 2023

By Raj Tulsiani, CEO of Green Park, Co-Founder Race Equality Matters, and member of the Parker Review Launch Panel. 

The latest Parker Review has been published – and it’s a rare win for both diversity & business reading. Ultimately, the Review has achieved its aim of getting an ethnic minority leader on most of the UK’s most prominent boards, and that should be applauded.

Data shows that 96% of FTSE 100 companies and 60% of FTSE 250 companies met the target of at least one minority ethnic director at board level. However, closer inspection of the figures reveals one or two eye-opening details.

• Only 63 of the FTSE 100’s 178 minority ethnic directors are British citizens – just 35%. Where are the UK passport holders? The British ethnic minority talent? In the FTSE 250, it’s 100 out of 178 ethnic minority leaders, or 56% - still a concerning figure.
• Ethnicity reporting shows that directors of Black heritage are far outnumbered by their Asian counterparts, while Green Park’s research shows that’s many of those are from a Hindu & Sikh background, rather than Pakistani and Bangladeshi Muslim heritage. Black leaders hold 15% of minority ethnic director positions in the FTSE 350, while Asian directors hold 58%. This suggests there has been too little progress for Black professionals since increased corporate focus following the murder of George Floyd.
• Of the FTSE 350’s 356 ethnic minority directors, just 65 occupy Chair, CEO, CFO and other executive directorships. That means the majority are in Non-Executive Director positions.

More encouragingly, almost 93% companies submitted information to the Parker Review this year, which suggests greater recognition of the importance of diversity reporting. The Review holds a mirror up to boards, reflecting progress in representation. For campaigners and those responsible for moving organisational culture forward to achieve more intersectionally engaging corporate eco-systems that drive productivity and innovation, the question is what can be done next? The Parker Review’s answer is to start examining ethnic representation in senior management, a step also taken by the FTSE Women on Boards Leadership Index Series.  

At Green Park, through our Business Leaders Index we have been tracking and measuring the gender and ethnocultural composition of individuals in the pipeline to FTSE Board roles since 2014. We’re therefore acutely aware of the challenges ethnic minority professionals face; why specific attraction and retention interventions have failed them over the last eight years; and the positive effect the Parker Review’s renewed focus can have on the psyche of business leadership.

Equally, we know through from the 4,500 companies and 4 million people who’ve participated in this year’s Green Park co-founded campaign, Race Equality Week, that the journey to pipeline improvement is a daunting one. Both from a demand and supply side, the inherited complexity and scale of the task dwarfs the Parker Review’s original (and now achieved) targets.

Nevertheless, we can start the journey most effectively by re-defining our hiring criteria and long-term investment in culture and engagement, thus widening attraction and addressing the preconception that greater diversity requires a compromise on candidate quality. Our experience is that the market values modern, inclusive recruitment mandates that are materially adapted to increase participation and not simply encourage under-represented groups to apply.  

Short term, the few organisations that have fallen short of the Parker Review’s target could benefit from shifting their recruitment perspective from demand-led to supply-led. And, if they’re not getting diverse placements, perhaps a new supplier beckons.

While the Parker Review presents a heartening picture overall, it’s worth remembering that data collection is not meaningful change. Helping these Boards create the cultural governance structures to support embedding DEI is a complex, continuous process – and organisations must be committed to either making it part of their company’s DNA or risk cultural obsolescence as the expectation on brands evolve.

 

The Parker Review 2023: a snapshot

► 324 Companies Responded — all of the FTSE 100 and 224 of the FTSE 250. The census demonstrates that ethnic diversity in FTSE 350 boards is increasing.

► 96 out of 100 companies (96%) met the target.

► Of these 96 companies, 49 have exceeded the target of one minority ethnic director per Board with these companies having more than one minority ethnic directors.

► 149 out of 224 companies who submitted data (67%) currently meet the December 2024 target. This number represents 60% of all FTSE 250 companies.

► Of these 149 companies, 28 companies have already exceeded the target of the Review with these companies having more than one minority ethnic directors.

► If we exclude the 85 Investment Trust companies, (112) companies of the 165 trading companies (68%) in the FTSE 250 have already exceeded the target of the Review.

FTSE 100

There were 178 directors from minority ethnic groups, representing 190 director positions. This represents 18% of all director positions. There are six minority ethnic directors who occupy positions of Chair, seven who are CEOs, nine who occupy the position of CFOs and nine occupying other executive directorships. The remaining positions are NEDs.

► 47% of directors from minority ethnic groups in the FTSE 100 are women.

► 63 out of the 178 minority ethnic directors are British citizens, representing (6.4%) of all director positions.

FTSE 250

There were 178 directors from minority ethnic groups holding 188 director positions. This represents 12% of all director positions. There are five minority ethnic directors who occupy positions of Chair, 14 who are CEOs, and 10 who occupy the position of a CFOs and five occupying other executive directorships including joint roles.

► 48% of directors from minority ethnic groups in the FTSE 250 are women.

► 100 out of the 178 minority ethnic directors are British citizens, representing (6.7%) of all director positions. This figure includes 16 who have dual or multiple nationalities, including British.

 

To download the full Parker Review, click here.