According to the ‘Beyond One by '21’ report, only 85 (8%) of 1,050 directors in the FTSE 100 were from a minority ethnic background, while 51 companies did not have any black and minority ethnic (BAME) directors.
Additionally, seven companies accounted for 40% of directors from a minority ethnic background and only nine people from a minority ethnic background held the position of chair or CEO.
“Today’s FTSE 100 and 250 boards do not reflect the society we live in, nor do they reflect the international markets in which they operate,” said Sir John Parker.
“Whilst we are making good progress on gender diversity in the boardroom, we still have much to do when it comes to ethnic and cultural diversity.”
The report proposed each FTSE 100 board to have at least one director who is from an ethnic minority background by 2021, with FTSE 250 boards to follow in 2024.
Boards were also recommended to enhance their transparency and describe their policy on diversity in annual reports, including a description of the company’s efforts to improve diversity within their organisation.
Business minister Margot James urged the larger companies to "lead from the front" and take up the recommendations "to promote greater boardroom diversity to reap the economic and social benefits”.
Another key recommendation was that companies should develop candidates for pipeline succession, with board chairs and directors mentoring or sponsoring BAME people within their companies to ensure their readiness for senior positions.
The report encouraged nomination committees of FTSE 100 and FTSE 250 companies to require their human resources teams or search firms to present BAME people for board appointments when vacancies were available.
The report also suggested the Standard Voluntary Code of Conduct should extend to the recruitment of ethnic minority candidates.