{"id":6042,"date":"2020-02-06T11:15:09","date_gmt":"2020-02-06T11:15:09","guid":{"rendered":"https:\/\/www.accountex.co.uk\/insight\/?p=6042"},"modified":"2020-02-06T11:15:09","modified_gmt":"2020-02-06T11:15:09","slug":"diversity-policy","status":"publish","type":"post","link":"https:\/\/www.accountex.co.uk\/insight\/2020\/02\/06\/diversity-policy\/","title":{"rendered":"FRC to crack down on UK groups’ lack of diversity"},"content":{"rendered":"

Research by the accounting watchdog shows that 52 per cent of FTSE 250 companies fail to mention ethnicity in their board diversity policies.<\/p>\n

Most of the FTSE 350 do not even set measurable ethnicity targets, according the Financial Reporting Council<\/a><\/strong> (FRC).<\/p>\n

The FRC says that only 14 per cent of FTSE 100 companies set measurable objectives for board ethnic diversity. For FTSE 250 companies the figure is 2 per cent.<\/p>\n

Poor on ethnicity<\/h3>\n

And, says the FRC, even where objectives have been set, no FTSE 350 companies report progress against them.<\/p>\n

Jon Thompson, CEO of the FRC, says: \u201cThe UK\u2019s record on boardroom ethnicity is poor.<\/p>\n

“It is unacceptable that talented people are being excluded from succession and leadership simply because companies are failing to put in place appropriate policies on boardroom ethnicity, are not setting targets or are not monitoring their progress against policies.<\/p>\n

Diverse boardroom<\/h3>\n

\u201cA more diverse boardroom leads to better business outcomes, which is why the UK corporate governance code, and now the UK stewardship code, requires companies and investors to promote diversity and inclusion.<\/p>\n

“We will monitor closely how companies report on their policies or explain their lack of progress, in this area.\u201d<\/p>\n

To address this failing, the FRC expects much improved reporting by companies under the new UK corporate governance code which promotes diversity in appointments and succession plans, including ethnic diversity<\/a><\/strong>.<\/p>\n

Succession pipeline<\/h3>\n

The research, by Cranfield university\u2019s school of management, also found that while 11 per cent of FTSE 100 and 4 per cent of FTSE 250 companies plan to increase ethnic diversity in the succession pipeline, most focus on general progression rather than specifically focusing on senior management.<\/p>\n

The\u00a02020 Parker Review<\/a><\/strong>, which includes the FRC research, showed that 150 companies out of 256 (59 per cent) did not have at least one director of colour on their boards, with less ethnic diversity observed on the boards of FTSE 250 companies: 37 per cent of FTSE 100 companies, and 69 per cent of FTSE 250 companies, do not meet the Parker Review target.<\/p>\n

To improve ethnic diversity, the Parker Review recommends each FTSE 100 Board should have at least one director of colour by 2021 and by 2024 for the FTSE 250.<\/p>\n

The FRC\u2019s analysis also found:<\/strong><\/p>\n