UK companies must act now to increase executive diversity – The European Magazine
9 May 2025
9 May

UK companies must act now to increase executive diversity

Diversity and inclusion within the UK’s corporate sector have been topics of intense debate for decades. Despite this, however, progress towards a more diverse boardroom has not only been slow but, more worryingly, seems to have taken a step backwards.

Sir John Parker’s independent “Beyond One by ‘21” review revealed that of the 1,087 director positions within the FTSE 100, only 87 were held by directors of colour. Of these, only 1.5% were UK citizens, even though people from BAME communities make up 14% of the population.

Subsequently, this number had declined further to 84, contrary to the target recommended by the Parker Review to have at least one ethnic minority director on each FTSE 100 company board by 2021. Indeed, 50% of the FTSE 100 firms did not have a single board director from an ethnic minority.

This is not only a problem at the top. A recent British government racial disparity audit found that BAME representation in the 7,700 positions below the boardroom of FTSE firms has fallen to 5.7% from 6.2% just 12 months ago.

While it is axiomatic that British businesses should better reflect wider social diversity, the long-term commercial benefits of inclusivity are undeniable. Research by global management consulting firm McKinsey in 2017, for instance, revealed that companies with more ethnically diverse executive teams are a third more likely to outperform on EBIT (earnings before interest and taxes) relative to companies in the bottom quartiles of such diversity. Similarly, McKinsey found that companies with more ethnically diverse boards are 43% more likely to outperform those that are not.

So, what can be done? It is critical that there is a commitment from the top to act on diversity, as nothing will happen unless business leaders take action. They need to set the right expectations, hold senior and middle management accountable, and help identify role models.

A racial inclusion agenda should also be high among a company’s business goals. This will help ensure balanced decision making and much-needed action encouraging diversity in talent.

About the author

Anuranjita Kumar is the Managing Director of Human Resources within RBS and was named among the “Most Powerful Women Leaders” by Fortune India. She was also recognised by The Leonie Awards 2019 within the “Top Ten Inspirational Women Leader of the Year” category. Her new book, Colour Matters? The Truth That No One Wants To See (Bloomsbury) is available now on Amazon, priced £11.69 in paperback and £8.60 as an eBook. Please visit www.colourmatters.in

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