In recent years, governments and regulatory bodies across the UK have been developing initiatives to increase the presence of women in the boardroom, but what does this mean for women of different races and ethnicity.
In recent years, governments and regulatory bodies across the UK have been developing initiatives to increase the presence of women in the boardroom.
Undoubtedly, these initiatives have made somewhat of an impact. Over the last four years, according to research from Women on Boards over 550 new women executives have been appointed to serve on boards across the UK. These women all come from diverse and varied backgrounds and are already making a significant contribution to the businesses that they serve.
This year, various regulatory bodies have set the tone for what they expect from businesses. Such as the Hampton Alexander review which expects all FTSE 350 businesses to have 33% of their board compromised of women by 2020. Some UK businesses are starting to make this shift towards having a higher percentage of females on their boards. Last week saw The Bank of England appoint two new external female members to its financial policy committee.
Despite this progress across the last four years, there is still a big gap that boards are struggling to fill in terms of diversity. There is a distinct lack of females of colour in executive board positions. According to research conducted by the Financial Times, all 25 female Directors who are working for FTSE 100 companies are all white, and 97% of the women sitting on the boards of FTSE 250 companies are also white.
Racial diversity is important for reflecting a changing customer base and to promote employee morale. Multi-racial representation at the board level ensures that employees identify with board members who may provide an important perspective on certain issues and encourage consideration of additional viewpoints.
A study by Sage Journals also concluded that companies which held a higher level of racial diversity in the boardroom, typically implemented stronger governance mechanisms and pursued more breakthrough product improvements.
The UK is starting to make progress towards closing the gap, with the Sir John Parker review setting the target for UK businesses to appoint at least one board director of colour by 2021. However, the case for ethnic and gender diversity is still very much lagging, businesses need to be able to cast their net wider and recruit from a more diverse talent pool.
The key for businesses looking to form more diverse boards is in the executive search. High profile candidates from all backgrounds do exist, but they are in areas businesses haven’t thought to look. Members on our network all have the same goal, to be the best on the market. This gives us a competitive edge meaning, our candidates are engaged and ready to make a difference. Through our Executive Search services, businesses can recruit for their boards from this large talent pool of candidates.
With this said, a board of directors’ diversity should never be about meeting quotas. Board diversity is about advancing businesses to new heights by bringing together thought leaders that share different perspectives and voices. Businesses that fail to grasp this are unlikely to survive.