Laggard boards ‘must try harder’ after IPOs highlight lack of diversity
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
A new study of London’s initial public offerings in 2015 has revealed the dismal state of ethnic diversity on corporate boards of emerging companies.
Of 25 IPOs in the “premium” category last year, almost a third of the companies had no black or ethnic minority board members, according to the report from headhunter Sapphire Partners.
Just 6 per cent of 130 non-executive directors appointed by those companies last year were not white. None of the 186 executive and non-executive directors appointed were black. In the 2011 census, 14 per cent of the UK’s population did not identify as white.
Those boards “really missed a trick in not coming to market with greater diversity,” says Kate Grussing, founder of Sapphire. “Recently listed companies all could have started their lives as Plcs with truly diverse boards; instead they are laggards and need to try harder.”
The findings mirror what were already identified as critical failings in the broader UK workforce.
The number of people from ethnic minority groups who are in leadership roles in FTSE 100 companies fell in the year to April 30 2015. Almost two-thirds of FTSE 100 companies had no ethnic diversity on their boards at all.
“Greater attention to a diverse pool of senior executive talent leads to increased performance for the company and its shareholders,” says Sir Winfried Bischoff, chairman of the Financial Reporting Council, the UK regulator. “The argument that you need diversity of thought and perspective has moved from being politically correct to increasingly being regarded as enlightened business sense.”