UK: Corporate governance: Parker Review – final report on ethnic diversity on boards

The recommendations made in the final report remain unchanged from those made in the consultation version of the report. The final report makes the following recommendations amongst others:
• Increase the ethnic diversity of UK boards. There should be at least one director of colour on each FTSE 100 board by 2021 and each FTSE 250 board by 2024.

• Develop candidates for the pipeline and plan for succession. FTSE 100 and FTSE 250 companies should develop mechanisms to identify, develop and promote people of colour within their organisations to ensure that there is a pipeline of board-capable candidates, and their managerial and executive ranks appropriately reflect the importance of diversity to their organisation.

• Enhance transparency and disclosure. The company’s annual report should include a description of the board’s policy on diversity. This should include a description of the company’s efforts to increase, among other things, ethnic diversity within its organisation, including at board level. Companies that do not meet board composition recommendations by the relevant date should disclose in their annual report why they have not been able to achieve compliance.

The Committee encourages members of the FTSE 100 and FTSE 250 to adopt the recommendations on a voluntary basis, however if there is insufficient progress towards the goals on that basis, the Committee reiterated that it may revise its approach and endorse that the recommendations (or relevant parts of them) become mandatory.

For more information on these articles or any other issues involving labour and employment matters in United Kingdom, please contact Robert Hill, Partner at Clyde & Co (www.clydeco.com) at robert.hill@clydeco.com
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