While most of British business struggles to improve the representation of women in boardrooms, focus is turning to another key diversity issue – race equality in senior management. The Labour Party has vowed to set ethnic targets for state-controlled bodies if it wins power. Although the IoD does not support quotas, we acknowledge that greater diversity on all fronts should be encouraged in order to improve corporate decision-making and, therefore, financial results, with all the economic benefits that can bring.
This is why we are partnering with the Black British Business Awards and the Precious Awards. And it is also why we are teaming up with Aberdeen Asset Management to hold a summit at 116 Pall Mall to explore why so few people from black, Asian and minority ethnic (BAME) backgrounds feature in the senior ranks of mainstream business.
Although Britain’s ethnic-minority population is growing, the proportion of BAME people in top management is declining. The number in senior positions fell by around 21,000 to 73,378 between 2007 and 2012, according to a report by Race for Opportunity, the race equality arm of Business in the Community. Prudential chief executive Tidjane Thiam remains the only leader of a FTSE100 company from a BAME community.
Experts say racial diversity remains undiscussed because the issue is not taken seriously. Jonathan Lamptey, an employment relations researcher at the LSE, said: “If there isn’t a business incentive, firms will not take notice. It’s difficult for BAME people to find a mentor. Research shows they have difficulty with getting the psychosocial support that is needed to help their career path.”
Unconscious bias is blamed for much of the reluctance of BAME people to access the support they need to rise to the top. Studies show that most bosses – mainly male and white – find it easier to identify with a white woman than with a man from an ethnic-minority community.
Some of our larger companies and consultancies have begun to set themselves targets for BAME representation. Accountancy firm PwC recently announced that around 20 per cent of its 53 new partners were from ethnically diverse backgrounds. Where companies have changed recruitment, promotion and retention tactics to aspire to broader gender representation by eliminating unconscious bias, some are now starting to think about how they can deploy similar tactics to improve the pipeline of talented BAME people.
Boosting representation of people from BAME communities at the top of companies can only benefit British business.