UKs FTSE 250 firms slow to improve boardroom ethnic diversity

The Parker Review Committee has published its 2025 report on improving ethnic diversity in UK businesses. It shows that while ‘significant progress’ had been made, nearly one in five of FTSE 250 companies had not made improvements. A total of 46 firms – which had a December 2024 deadline to appoint one or more ethnic minority director – ignored the survey or still had all-white boardrooms. We’ll speak to a diversity and inclusion expert about the report and what firms can do to improve ethnic diversity across the business.

Established in 2015 and first chaired by Sir John Parker, the Parker review committee was tasked by the government with recommending ways to increase minority representation in senior British business roles. Its goal was to enhance business performance by utilising all talents, minimising the risk of group-think and ensuring equal opportunities for ethnic minorities. At the time of its launch, more than half of FTSE 100 boards were entirely white.

The 2025 report shows that by December 2024, 95 out of 100 FTSE 100 companies had met the Committee's target of having at least one ethnic minority director on their boards. FTSE 250 companies were given until 31 December 2024 to meet this target, and the report reveals that 204 out of 236 companies now have at least one ethnic minority director, representing a 17% increase from 2023. As of December 2024, ethnic minority executives make up between 9% and 11% of the total number of UK-based senior managers across FTSE 100, FTSE 250, and in-scope private companies, with an average target of 13% to 15% set for 2027.

As Personnel Today reports, it is mid-sized UK businesses which have been slow to boost ethnic diversity on their boards - nearly one in five of FTSE 250 companies had not made improvements. Various reasons are given but the one we can identify with from our own experience of working in this area is the need for senior level buy in. Diversity initiatives are only effective when leadership actively supports and drives them. As the report highlights, mentoring schemes, board-level commitment, and executive-level accountability are crucial for sustainable progress in ethnic diversity.

So let’s hear more on this. Shuabe Shabudin is a D&I specialist who is part of a team helping clients to improve ethnic diversity on their boards and earlier he joined me by video-link to discuss it. He told me the first step is getting buy-in from senior leaders: 

Shuabe Shabudin: “It’s something that's often spoken about and clients will often say, particularly those clients that are in a straight HR background, that they find it difficult to break through that wall, to break through the ceiling to get up to C-suite, to get up to the board, and I often refer to it as being a carrot and a stick. So, the carrot is, morally and ethically these are just the right things to do. However, sometimes we do have to be honest and the stick approach needs to be used. The stick approach, for me, is well how does this add to my bottom line? It’s all very well what you're saying, Shuabe, I’d love to do that but I haven't got the funds to, I don't know that it will make any money or make any savings if we if we take your advice. So, when there are reports such as this which highlight that there are still very, very, very big issues in relation to the recruitment and the retention, the hiring, of people from a minority ethnic background into senior positions, well, it just shows that there is work that still needs to be done. You can also look at it as a distinguishing factor. So, if there's work that needs to be done, it's a way to set yourself apart from your competitors, it's a good story to tell, again, both morally, ethically, and then also from a business-critical point of view. So, I say to the HR colleagues that I'm working with, look, use this information, use this data, use these reports, to show that it is a live issue, to show it's something that's important to people and then the way that you can make it a benefit is to say, and this is how we can make ourselves an employer of choice, this is what we can do to win, and retain, the best talent which is an ever increasing, or a continually difficult, task.”

Joe Glavina: “David Tyler, chair of the review's committee, is quoted saying how diverse businesses are more productive and how this issue affects the bottom line. And there’s the wellbeing angle – diverse workplaces are happier. Would you agree?”

Shuabe Shabudin: “Yes to all of those points. There is a significant amount of empirical data which shows that a more diverse organisation is more productive. I think you could also say that an organisation which is more diverse will then be able to have a greater sense of belonging to all of the employees, belonging makes you happy, and I think we can all say that we work better when we are happy and when you're happier and you work better productivity increases and, of course, that's going to add to the bottom line as well there. From a reputation point of view, yes I think it's one of those scenarios where you want to be on the right side, you don't want to be on the wrong side. If you are known as an organisation that doesn't have any level of diversity, or an acceptable level of diversity, if I can call it that, that's obviously going to act as a negative indicator, or if you can seem to be taking steps genuinely to be furthering the levels of diversity in your organisation, it's going to be something that people warm to and, nowadays, with Gen Z or the Alphas as we're going to be coming to, these kinds of issues are much more important to them than whether they get a company car and gym membership, for example. So, very important reasons, very important factors to take into account as well.”

Joe Glavina: “It’s interesting how the data shows a lot more progress has been made on gender diversity than ethnicity and I wonder if that’s connected to the way the two are regulated. So, gender pay gap reporting is mandatory but ethnicity pay gap reporting is purely voluntary. Is that a factor, do you think?”

Shuabe Shabudin: “Quite possibly, Joe, yes. I think that's an interesting way of looking at it and, perhaps, not least because whether or not ethnicity pay gap reporting is going to be made mandatory is something we've been discussing literally for years. So, I think it could well be that it is therefore seen as something that is of - gosh, can I say less important, or less business critical, less impending, because of that and, certainly, there are more structures in place to deal with the gender inequality that there may be in a work in a workforce. So, I think there's something in that and, again, it's another ceiling, perhaps, it's another barrier, that might need to be broken through by HR. But coming to the points we were discussing before, one of the ways is to use this data to say look, this is how we can set ourselves apart in a positive way.”

This latest update report from the Parker Review, a 73 page-long report, is called ‘Improving the Ethnic Diversity of UK Business, March 2025’ was published on 11 March. We’ve included a link to it in the transcript of this programme for you.

- Link to Parker Review 2025

- Link to Personnel Today article: ‘Mid-sized UK firms slow to improve boardroom ethnic diversity’