Good morning everybody. Thank you EY for hosting this event.
It’s great to be here to launch this landmark report, and I would like to thank Sir John and his steering group for the immense amount of work that lies behind today’s event.
And make no mistake: this work matters. Diversity matters.
You’ve heard it before but it’s true.
People from different backgrounds bring different experiences and perspectives, and it’s long been recognised that greater diversity in the boardroom can help create constructive and challenging dialogue.
Having this diversity around the table helps ensure the board will fulfil its duties to the full, and take well-grounded decisions.
And these perspectives are good for leadership too.
We can all think of times when organisations have been crying out for change, but existing practices or assumptions have remained unchallenged. Diversity is a great counter to this.
And it’s important for trust. Trust in the board by their workforce. Trust by employees who want to believe that if they work hard they too can make it to the top. That they work in an inclusive environment which embraces difference. Where difference is recognised as an asset to the company and not treated as a barrier to progress.
And then there is trust in business by society. But recent years have seen that trust challenged.
Businesses of all sizes need to take positive steps to ensure they are not seen as out of touch, to demonstrate that they are operating for the benefit of the many, not the privileged few.
So we must ensure that business leaders are more representative of the people that work for them, and of the customers and communities they serve.
But while there has been an improved focus on gender diversity in recent years, the attention given to ethnic diversity has been minimal.
So I am very pleased that Sir John has produced this report.
But one could not call its findings ‘pleasing’.
It contains a startling fact: while 14% of the population identifying as black and minority ethnic, only 1.5% of directors in FTSE100 boardrooms are UK citizens from a minority background. More than half of the FTSE 100 Boards are exclusively white. I find this totally unacceptable.
This does not reflect the society we live in. Nor does it reflect the international markets in which FTSE companies operate.
We are missing voices and perspectives. So many people are being denied opportunities that should be available to them. It is not right that boardrooms in 2016 can still be predominantly male and exclusively white.
And it is a problem that concerns us all.
People of colour are in general more likely to go on to higher education compared to their white peers. Yet this research shows they are less likely to be in leadership positions in business.
Whether due to failures in recruitment, or lack of internal opportunities or outright discrimination, the result is the same. Business and society at large are losing out on talent. This isn’t necessarily because of discrimination. But it is about culture change, about breaking bad habits.
Businesses need to recruit the best person for the job if they are going to compete in today’s economy, and people from all backgrounds should be given the equal opportunities to contribute.
Because in business as in politics we are selling ourselves short if we don’t seek out people from different backgrounds. Sir John’s report sets out the commercial case for this very well, covering improvements to leadership, brand, culture, talent and the supply chain.
That’s why I fully endorse Sir John’s areas of recommendation. Not just that there should be a target to focus companies’ attention, and that companies can do much more to identify and sponsor people with potential, but that there should be stronger codes of conduct for search firms. We need everyone involved in recruitment and talent management to step up a gear.
But our success in improving gender diversity shows how embedded cultures can change when business addresses the challenge.
I am optimistic that with we will see real progress in improving ethnic diversity on boards over the next few years, and I hope the companies represented here will work to first meet, and then surpass the target in The Parker Review.
Companies like Old Mutual, Standard Chartered Plc and Unilever are all leading the way in having a more diverse board. It is perhaps unsurprising that these are also companies that are doing well on gender balance.
Many of you would have heard the Prime Minister talk about building an economy that works for everyone – a message with inclusivity at its heart.
This is the government’s mission. It is my department’s mission. And it should be the mission of business also.
Our biggest companies must demonstrate that background is not a barrier.
Where there is a will and drive for greater fairness, anything can be achieved.
It starts with each one of us, whatever we do – whether as a company Chairman, an HR Director or a headhunter – we all need to effect this change.
Sir John has set out his views, and now it’s over to you to give him your feedback, and then to take action.
I look forward to seeing how you get on. Thank you.