Vince Cable is preparing to launch a review into the lack of ethnic minority directors in Britain’s boardrooms, in a move that closely mirrors the work undertaken by Lord Davies to increase the number of female directors.
The business secretary said he had consulted with Trevor Phillips, former chair of the equality and human rights commission, as well as the comedian Lenny Henry, before starting a campaign that will probably include specific targets for the percentage of black, Asian and ethnic minority directors employed by big companies.
Cable said: “We will have a series of milestones and events and there may well be some target, which I’m not able to tell you about at the moment as we have to make sure it is clear and deliverable ... [Targets are] more difficult with ethnic minorities [when compared to gender], because how do you measure these things? Is a white Turkish person an ethnic minority for being a Muslim? It is quite tricky. That’s not to say you shouldn’t do it, because it is quite powerful as a weapon.”
The initiative follows Lord Davies’ review into women in the boardroom, which began in 2011 and was required by the government to improve numbers of women in senior business roles.
Davies set a target of increasing board membership of women to 25% in FTSE 100 companies by 2015. Having started at 12.5%, the figure now stands at 22%. In June the commodity trader Glencore became the final FTSE 100 to appoint at least one woman to its board when Patrice Merrin became a non-executive director.
However, as the government edges towards its target for women, the situation for ethnic minority diversity at the top of business has been regressing, Cable said.
A study of the top 10,000 executives published this year – co-authored by Phillips and Professor Richard Webber, of Kings College London – found that more than half of FTSE 100 firms had no non-whites at board level, and two-thirds had no full-time minority executive directors.
That report was followed in June by research from the charity Business in the Community (BITC) which has been calling for a Davies-style review on ethnicity.
The charity’s report found that only 6% of top management positions and 7.9% of management positions were held by black, Asian and minority ethnic people in 2012, compared with 10% in total employment in the UK. The management figures have edged up from 5.5% and 6.8% respectively since 2007.
Cable said he was confident that a voluntary campaign could begin to reverse the current lack of diversity in UK boardrooms and has consistently shied away from compulsory quotas. However, the shadow business secretary, Chuka Umunna, said: “If elected next spring I will commission a Davies-style report. But this alone is not enough. I don’t accept there are not enough [ethnic minority] and women workers who do not merit promotion to boards of Britain’s biggest companies. So I am not taking quotas off the table.”
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