THE number of ethnic minority and women members on the boards of top UK companies has seen a significant decline, according to a recent survey.
Recruitment firm Spencer Stuart said its analysis showed there is a 44 per cent drop in minority ethnic non-executive directors in top firms this year. Further, 51 per cent of new directors are women, a drop from 60 per cent last year.
The firm’s 2023 UK Board Index, published last week, found an increase in the proportion of women in one of the four senior board-level leadership positions.
Research showed that 90 per cent of boards in the top 150 companies have at least one director from a minority background this year.
Chris Gaunt, head of the UK board and chief executive at Spencer Stuart, said, “More diverse boards clearly offer less risk of group think and more nuanced, true diversity of perspective and an ability to react in a multi-layered way to complex events.
“This needs to be a collective societal push, with investors and executive committees expecting diversity from their boards.”
Spencer Stuart said the proportion of women among all first-time directors also declined to 45 per cent in 2023 from 54 per cent last year.
There is a 10 per cent increase in number of women in top leadership roles in prominent UK firms this year compared to last year. However, women hold just 20 per cent of these roles.
This year, 53 per cent of companies reached the 40 per cent target for women on boards, up from 46 per cent last year.
In another significant development, 18 boards achieved gender parity in 2023, down from 26 in 2022. Meanwhile, 73 boards comprise at least 50 per cent female non-executives.
The Parker Review has set a target for every FTSE 250 company to have at least one board director from a minority ethnic background by 2024.
As many as 41 out of 53 FTSE 250 companies surveyed by Spencer Stuart have met the target.
As per the survey, 13 per cent of all directors (196 out of 1,526) are from a minority ethnic background, compared with 12 per cent last year; of these, 42 per cent (83) of minority ethnic directors are UK nationals.
Among non-UK minority directors, 40 per cent (45) are from the US; the next most commonly represented country is India at 11 per cent (12).
Minority ethnic directors are most likely to be current or former CEOs or general managers, the survey said.
The most common functional experience among minority directors is general manager roles (37 per cent), followed by group CEO roles (24 per cent).
Companies with most directors from a minority background are Airtel Africa, Network International, Prudential, Diageo and Endeavour Mining.
Diageo tops among companies with most women on boards, followed by Severn Trent, WH Smith, Auto Trader, Greggs, Pennon, Marks & Spencer and Schroders.
In the past five years, the proportion of all board seats held by women has grown steadily from 28 per cent to 40 per cent.
Notably, 68 per cent of remuneration committee chairs and 53 per cent of members are women in top 150 companies.
Also, 13 per cent of remuneration committee members and 14 per cent of audit committee members are from minority background.