Yesterday (1st October 2020), the confederation of British Industry (CBI) called on UK firms to have at least one BAME (black, asian or minority ethnic) member on their board by 2021. This scheme has been backed by firms such as Deloitte, Aviva, Linklaters and Microsoft.
Launching the ‘Change the Race Ratio’ group, the CBI has urged UK firms to create “clear and stretching targets” and to aim for diversifying their firms at board and senior management levels.
This comes after the Parker Review Committee conducted by EY revealed the lack of diversity within big UK businesses. In 2017, it was reported that over half (51 per cent) of FTSE 100 companies had no ethnic minorities on their board. This has marginally improved by 2020 with 37 per cent of FTSE 100 companies lacking any ethnic minority representation on their board.
Furthermore, the CBI called for smaller companies within the FTSE 250 to reach this same target by 2024.
Sir John Parker, Chairman of the Parker Review Committee, said:
To remain competitive in the global market, UK businesses must focus further on the recommendations in the report, increasing alignment of the Board with its customer base at home and overseas. They must also address the key challenges of recruiting board talent now and in the future, recognising the significant demographic changes taking place in the UK and international markets in favour of ethnically diverse candidates. Action is needed to bring about long-term change.
Similarly, Lord Karan Bilimoria, the first BAME president of the CBI, said:
The time has come for a concerted campaign on racial and ethnic participation in business leadership. Progress has been painfully slow.
The CBI’s ‘Change the Race Ratio’ group has been announced on the 10 year anniversary of the Equality Act (2010) which legally protects people from discrimination in the workplace and wider society. Merging together nine previous Acts, the Equality Act became a centralised framework which outlawed discrimination on the basis of age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation.
Ray Silverstein, London head of employment at Browne Jacobson LLP, states the limitations of the Equality Act:
It is a matter of major regret and frustration to many of us in the field that aspects of UK discrimination law, introduced to tackle the overt and systemic bias that favours certain individuals in relation to employment, including on the grounds of race, are not working effectively.
An example of where discrimination law is deeply flawed is positive action in recruitment and promotion. The low take up of positive action reflects the fear and uncertainty of employers in utilising this as one of the tools to tackle racial underrepresentation within their organisations.
Positive action if carefully explained, promoted and understood, can form part of the essential tools for change that employers increasingly use with confidence to tackle underrepresentation.
Mandy Laurie, head of employment at Burness Paull LLP, had a more positive view towards the Equality Act, saying:
The Equality Act 2010 (the Act) has been heavily criticised over the years as not being fit for purpose, both in the employment sphere and goods and services, and it would be fair to say that many an employer has benefitted from its lack of “teeth” and the burden of proof being on the individual.
An infrastructure of rights and principles which are not overly prescriptive allows flexibility in the evolution of the law, to reflect changing attitudes in society. Examples of this include changing attitudes of what constitutes a religion or philosophical belief – as recently as last week, an Employment Tribunal Judge ruled in a case against Lidl that their sacked employee’s belief in stoicism was a belief protected under the Act.
The Equality Act, as it stands, is a nimble and adaptable piece of legislation, which allows the scope of our anti-discrimination protection to evolve in parallel with society immediately, without the need for calls for separate pieces of standalone legislation which leaves a Claimant high and dry just because of their timing.
*To obtain the results of the 2020 Parker Review survey, EY reached out to all the FTSE 100 companies of which 96 per cent responded. 81 per cent of the FTSE 250 responded to the 2020 Parker Review Survey. The 2017 Parker Review Survey was based on analysis of publicly available information on all companies in the FTSE 100.