Britain’s Largest Companies Fail to Boost Diversity on Boards, Regulator Finds
A majority of big U.K. companies didn’t have goals for ethnic diversity in the boardroom in 2019
The Wall Street Journal article, "Britain’s Largest Companies Fail to Boost Diversity on Boards, Regulator Finds," quoted Russell Reynolds Associates Consultant Jenna Fisher on the increasing requests for diverse candidates on U.K. boards. The article is excerpted below.
Britain’s largest companies rarely set targets for ethnic diversity on boards and fail to report on the issue, amplifying calls by the U.K.’s audit and accounting regulator to increase efforts to promote ethnic diversity.
The research by the Financial Reporting Council and a government-backed committee comes amid increased scrutiny over companies’ reporting, disclosure and business practices following a series of corporate collapses, including the 2018 failure of construction and outsourcing giant Carillion PLC.
Companies with diverse executive teams perform better and post bigger profit margins compared with businesses with no or limited diversity in their leadership teams, a 2018 study by McKinsey & Co. found. And investors and regulators increasingly have urged companies to boost the number of executives with diverse backgrounds.
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Recruiters in the U.K. and elsewhere are saying they are receiving more requests from companies for diverse sets of candidates, including for board seats. “Within the last 12 months, we have seen an increase in our clients asking for diverse slates of candidates,” said Jenna Fisher, a managing director at Russell Reynolds Associates, who heads the recruitment firm’s corporate officers practice.