Companies must “develop diverse talent from within their own walls” if they wish to close the diversity gap.
This is the opinion of John-Claude Hesketh, managing partner at Martin Hawk following on from the news that FTSE 100 businesses are likely to miss their diversity targets of having at least one Black, Asian & Minority Ethnic (BAME) individual on every FTSE 100 board by 2021. The Parker review has found that 37 per cent of FTSE 100 firms still have no BAME members on its board.
The Parker review was set up by Sir John Parker.
Mr Hesketh said:
Businesses must stop putting the blame on a lack of suitable candidates, and instead focus on developing diverse talent from within their own walls. Working with many global businesses, we are often tasked with ensuring a diverse pool of candidates for leadership positions. The problem is that such sought after leaders are not plentiful, and the pool of diverse leadership is rather small.
Without executives willing to take the time to train and develop a diverse individual to grow into a role and progress in their career, the gap we currently have will continue to exist for many more years to come. It’s far easier to just employ somebody from outside the business who can just step in and get the job done, rather than nurture talent from within. This is the real crux of the issue, and something that businesses of all sizes must address if we’re to tackle the diversity gap.
If companies truly want to change their diversity mix at the top table, managers must take action by actively seeking out the most promising employees, no matter their background, and encourage them and equip them to reach their full potential.
Green Park, a recruitment agency predicts that FTSE 100 companies will not hit boardroom diversity targets until 2066.
The FTSE 250 and 350 performed even worse with 69 per cent of the 250 boards having no ethnic diversity and 59 per cent of the FTSE 350.
The FTSE Small Cap 100 and the London Stock Exchange (AIM) UK 50 markets are even further behind the other FTSE businesses as 80 per cent of their boards are white.
Tracey Brady, managing director at Company Matters, said:
Diversity and inclusion are at the top of the agenda for many companies, and over recent years we’ve seen swathes of research measuring the FTSE 350. While those companies do account for a large slice of the economy, many are global corporates and don’t reflect the situation in the UK.
Targets have clearly moved the dial at FTSE 350 level. It may be time for the Government to shift its focus to representation in smaller companies, but this push for change also needs to come from the bottom up. It’s vital that the AIM and FTSE Small Cap companies step up and engage with the need to diversity their boards and senior management. Not only is diversity shown to improve the productivity and profitability of companies in their own right, but these smaller companies are a major talent pipeline for the FTSE 250. If smaller businesses start doing the right thing and behave as good corporate citizens, we may be able to make greater and faster change in the UK.