The UK has been seriously tackling the issue of diversity in the senior ranks of British business. The Davies Review, led by the charismatic but challenging Lord Mervyn Davies, pushed UK boards to get 25% of women on the boards of FTSE 100 companies. This triggered concerted action on the part of the nominated companies because they would be publicly measured, and reported.
The goals of the Davies Review were met, although there were perhaps some unintended consequences, such as the impact on the executive ranks with increased demand for women on boards. However, with the end-goal in mind, the Davies Review recently made way for the Hampton-Alexander Review, led by Sir Philip Hampton, Chairman of GSK, and Dame Helen Alexander of UBM. Their aim is to broaden the scope of effort toward the expanded FTSE 250, and to specifically tackle the issue of strengthening the pipeline of women executives. Hampton-Alexander set a target of 33% of pipeline executive roles in FTSE 100 companies must be fulfilled by women by 2020. The review also recommends that the Financial Reporting Council amend the UK Corporate Governance Code to require FTSE 350 companies to report data on women in leadership positions which serve the talent pipeline.
While the effort on gender diversity was seemingly permeating the boardrooms of Britain’s biggest firms, this progress did not address the broader opportunity of diversity. For this to happen, race and ethnicity also needed to be looked at. And so, Sir John Parker, Chairman of Anglo American; fellow board member with Sir Philip, and former member of Lord Davies steering group, took on that task.
Sir John led a review of the FTSE companies to see where ‘people of colour’ (the term used by the review) were present in UK boardrooms, specifically FTSE companies. The findings reflected many of the early data published in the Davies review, with single digits everywhere. The recommendations published in the Parker Review – ‘Beyond One by 21’ – have built on the foundations of Davies and Hampton-Alexander, to encourage systemic change which would usher in greater levels of participation by people of black and minority ethnicities in UK boardrooms.
Last week, we saw the publication of – ‘Race in the Workplace’ – the review by Baroness McGregor-Smith, who tackles the broader challenges of improving the participation of black and minority ethnicities in UK workplaces. Ruby McGregor-Smith, until recently CEO of Mitie, was formally the chair of the Women’s Business Council and has seen first-hand the importance of action in changing the diversity landscape. Her report is explicit in its recommendation – calling for action now!
Finally, the Financial Reporting Council, stewards of the UK Corporate Governance Code, also took the step of making specific provisions for diversity in the code, and are serving constant reminders to Chairman and directors about the need for diversity.
This all adds up to a considerable pressure on UK companies to report out their diversity data to the respective inquiries, driven by the Department of Business. However, the Sunday Times last weekend reported that UK companies have voiced concerns about the level of commitment needed to satisfy the requirements of these respective directives, and that they wish for a simplified approach. The article suggests that the heads of each of the groups will meet this month with the Minster for Business and Corporate Responsibility, Margot James, to discuss proposals for making the Financial Reporting Council the body to which businesses will report their diversity data.
With UK companies, from FTSE 100 to SMEs, facing increased levels of scrutiny on board, executive and workplace diversity, leaders need to be acutely aware of how they can achieve diversity and inclusion in their companies. Liftstream is really pleased to announce that we’ll bring together a panel featuring: Margot James (UK Minister for Business and Corporate Responsibility), Paul George (Financial Reporting Council), Dr Yvonne Thompson (Parker Review), Dr Elena Doldor (Davies and Hampton-Alexander), Denis Woulfe (Women’s Business Council) and Pavita Cooper (30% Club) at our executive forum on March 28th in London.
To register to attend ‘The Board Meeting on Biopharma Boardroom Diversity’, click here: https://bit.ly/boardstepLDN
We’ll be pleased to host all the main actors for what promises to be an illuminating debate.