Trevor Phillips' work on board diversity triggers Cable probe

01 October 2014 -

Coalition may introduce boardroom targets for ethnic minorities in UK’s largest firms, eight months on from scathing report penned by leading equality specialist

Jermaine Haughton

Business secretary Vince Cable is lining up a government investigation into the lack of black, Asian, minority or ethnic (BAME) talents in British boardrooms – eight months on from a study that warned of a “diversity deficit” at the top that is stifling business opportunities. Mirroring Lord Davies’ work to boost the number of female directors, the Liberal Democrat grandee has mentioned the possibility of bringing in specific targets or quotas for BAME directors in big companies.

The study that sparked Cable’s action emerged eight months ago from interim and executive search specialists Green Park. Co-authored by former Equality and Human Rights Commission (EHRC) chair Trevor Phillips, The Green Park Leadership 10,000 found that senior management within the FTSE 100 was still overwhelmingly white and male. Following discussions with Phillips, plus actor and comic Lenny Henry, Cable decided that work needed to be done – but explained that setting targets for ethnic diversity will be more difficult than those related to gender.

“We will have a series of milestones and events,” he told the Guardian, “and there may well be some target, which I’m not able to tell you about at the moment, as we have to make sure it is clear and deliverable ... [Targets are] more difficult with ethnic minorities [when compared to gender], because how do you measure these things? Is a white Turkish person an ethnic minority for being a Muslim? It is quite tricky. That’s not to say you shouldn’t do it, because it is quite powerful as a weapon.”

Lord Davies’ review into women in the boardroom, which began in 2011, set a target of increasing female board membership in FTSE 100 companies from 12.5% to 25% by 2015. Currently, the figure stands at 22% - however, when looking a bit deeper into the statistics, the scheme hasn’t been as successful as it seems. In fact, few women still hold full-time senior roles. According to the latest data from the Professional Boards Forum’s BoardWatch, most of the high-level UK posts held by women are non-executive director briefs, with the percentage of full-time female directors only standing at 7.2% (although an improvement over the 5.5% recorded for 2011).

Green Park’s study, meanwhile, found that more than half of FTSE 100 firms had no non-whites at board level. It also found that two-thirds had no full-time, minority executive directors. “Viewed from this perspective,” Phillips remarked, “the top leadership of the FTSE 100 remains almost exclusively male and white.”

Phillips was particularly concerned about the lack of Chinese and Far East representation on boards, given the strength of UK communities from that heritage and the global rise of China’s economic importance. He added: “As China grows to be the largest consumer market in the world, the fact that two-thirds of our top companies have all white executive teams – and not one person of Chinese descent, should set off a big red flashing light.”

For further thoughts on these issues, read this guest blog from Advance Boardroom Excellence leader Helen Pitcher.

Image of Trevor Phillips courtesy of the Wikimedia Commons.