Lack of diversity on FTSE 100 boards puts country’s competitiveness ‘at risk’ study says

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The paucity of women and ethnic minorities in senior positions in the FTSE 100 is causing a ‘deep diversity deficit’ which could put Britain’s competitiveness at risk, a report suggests.

Analysis of 10,000 executives in the top listed UK firms operating across 15 sectors found that of the 289 chairman, CEO and CFO posts in the FTSE 100, just 12 are women.

More than half of the FTSE 100 companies have no non-white leaders at board level, whether executive or non-executive, and two thirds have no full-time minority executives at board level, according to the report, the Green Park Leadership 10,000.

“In the past decade there has been a growing consensus that our business elite is simply too narrow in its outlook, too prone to a herd mentality and just not switched on enough to the 21^st century world,” said Trevor Phillips, former chair of the Equalities Commission, now chair of Green Park Diversity Analytics.

“As China grows to be the largest consumer market in the world; and as the United States becomes a majority-minority society the fact that two thirds of our biggest companies have all white executive teams – and apparently not one person of Chinese descent – should set off a big red flashing light that we aren’t equipping ourselves to compete in these markets.

He added that as women become more important consumers domestically, it’s self-defeating that they remain junior partners at the top of our economy.

“The fact is that if we’re going to earn our way out of the recession, we just can’t afford to be saddled with a diversity deficit this big,” he added.

The report also found that the fifteen industrial sectors of the FTSE 100 show very different levels of diversity. Strikingly, those which typically show a smaller gender deficit, such as utilities, tend to show a much larger ethno-cultural deficit; and vice versa, as, for example, in the case of natural resources.

Women are most likely to be found in top 100 positions in consumer-focused businesses, such as media, technology and consumer goods, the report says, and the largest gender deficits occur where the customers are other businesses, such as in the engineering and construction sectors.

The data also revealed that the talent pipeline shows that there are enough female and minority candidates available for the top jobs. Each FTSE 100 firm would, on average, need to replace just two men with two women to reach an overall 30% target amongst FTSE 100 Top 20 employees.

“As companies seek to compete in a global environment and better reflect and understand their customer base, comprehensive information about how their leadership team deliver on their commitments compared to others in their sector will deliver a diversity dividend,” said Raj Tulsiani, CEO of Green Park Group.