As president of the CBI, I am delighted to announce that we, alongside Aviva, BiTC, Brunswick, City Mental Health Alliance, Cranfield University, Deloitte, Linklaters, Microsoft and Russell Reynolds will soon launch Change the Race Ratio – a campaign to increase racial and ethnic participation in British businesses.
The campaign will call for all businesses to set and publish clear targets for greater racial and ethnic diversity at board and senior leadership levels. The campaign will launch at the end of October – ahead of the launch we invite you to sign up and commit to helping change the race ratio through tangible action.
We believe that the time for change is now: business needs to take urgent action on black and ethnic minority participation at senior leadership levels.
We realise that real change won’t happen without a concerted effort. The Parker review into ethnic diversity on boards, which was published in 2016, set out a series of well-thought-through recommendations. Yet little progress has so far been made; early in 2020, an update to the Parker review revealed that 37% of FTSE 100 companies surveyed do not have any ethnic minority representation on boards and 69% of FTSE 250 companies have no ethnic minority representation on their Boards.
Evidence shows, Boards that have racial and ethnic diversity perform better – McKinsey data from 2019 highlights that in the case of ethnic and cultural diversity, top quartile companies outperformed those in the fourth quartile by 36% in profitability.
What are we asking businesses to commit to?
We are asking business to take tangible action. Our ambitions, as set out by our four Commitments to Change, are based on the Parker Review findings.
Increase racial and ethnic diversity among Board members: take action to set targets to achieve:
- FTSE 100 – At least one racially and ethnically diverse Board member by end 2021
- FTSE 250 – At least one racially and ethnically diverse Board member by 2024.
Increase racial and ethnic diversity in senior leadership: take action at ExCo and ExCo minus one to set clear and stretching targets and publish them within 12 months of making this commitment.
- In addition, establish a separate target for black participation at both levels.
Be transparent on actions: publish a clear action plan to achieve the targets and share progress in the Annual Report or on the company website.
- In addition, disclose ethnicity pay gaps by 2022, at the latest.
Create an inclusive culture in which talent from all diversities can thrive: focusing on recruitment and talent development processes to drive a more diverse pipeline; data collection and analysis; fostering safe, open and transparent dialogue, with mentoring, support and sponsorship; and working with a more diverse set of suppliers and partners, including minority owned businesses.
We believe that if all businesses promise to take these actions, publish their targets and are transparent about progress, creating a culture that enables diverse thinking and talent to thrive, then together we can Change the Race Ratio. In so doing, we will create a more diverse and inclusive business community and ultimately, a more equitable society.
Change happens when we challenge and support each other
Our campaign will foster a community that works together and shares good practice – because we know that real change will take time, and a dedicated, concerted and collaborative effort. We must challenge and inspire each other to push harder and do better.
Whether you are a business making good progress or are unsure about where to start, signatories will be supported by our founders and ambassadors and will, in time, have access to a range of resources to support them to take action on our commitments to change.
How can businesses get involved?
We are encouraging business leaders to become signatories and make a commitment to Change the Race Ratio ahead of our official launch at the end of the month. If you are interested in becoming a signatory and taking action, please contact Richard DeNetto.