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Targets Alone Are Not Enough to Improve Board Diversity

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Companies need to address unconscious biases in the recruitment process and develop strategies to retain diverse talent, not just set diversity targets, a consultancy has cautioned.

The Clear Company’s recommendations follow the release of the Parker Review, which found that FTSE boardrooms do not reflect the ethnic diversity of the UK. Of the 1,087 director positions in the FTSE 100, just 8% are held by people of colour, although 14% of the UK’s population is from a non-white ethnic group. Additionally, of those directors of colour, just 1.5% are UK citizens.

The drive to diversify the UK’s C Suites will become more important as ethnic diversity grows. The UK is predicted to become the most diverse country in Western Europe by 2051, with over 30% of the population from ethnic minority or migrant backgrounds.

The Clear Company has expressed support for the Parker Review’s recommendation that all FTSE 100 companies should have at least one board member from an ethnic minority by 2021. However, a simple target isn’t enough and is unlikely to be met unless companies overhaul their culture, from recruitment to retention.

Companies which fail to change their culture and educate existing board members on diversity issues are unlikely to be able to recruit and retain diverse talent, the consultancy suggested.

Kate Headley, Director of The Clear Company said: “The recommendations outlined in the Parker Review are a positive reflection of the growing understanding of the importance of having a diverse and inclusive board.”

However, “targets without competence and transparency can create a culture of tokenism and can shape detrimental hiring practices,” she cautioned.

Inclusive hiring is particularly difficult at the senior levels, where headhunting networks and unwritten rules influence recruitment, she said.

Companies “should aim to raise the bar for hiring in the boardroom, leaving ability to perform the role as the only selection criteria,” she added.

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