LEADERSHIP 10,000 2018 - green-park.co.uk · 3 FOREWORD The effort of the past few years to improve leadership diversity in FTSE 100 companies is paying off - but only if you’re

LEADERSHIP 10,000 2018

A REVIEW OF THE GENDER AND ETHNOCULTURAL DIVERSITY OF FTSE 100 LEADERSHIP

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RAJ TULSIANICEO | Green Park

THE BLACK, ASIAN AND MINORITY ETHNIC (BAME) PIPELINE APPEARS TO BE LEAKING BADLY WITH MORE THAN HALF OF

INDUSTRY SECTORS SEEING A FALL IN THE PROPORTION BAME LEADERS AT TOP 100 LEVEL.

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FOREWORD

The effort of the past few years to improve leadership diversity in FTSE 100 companies is paying off - but only if youre female, and mostly if youre white. As a result, overall progress is stalling, and in practice it may mean that we risk failing to hit both the Hampton-Alexander and Parker targets.

Despite a small dip at the very top levels, the FTSE 100 pipeline is filling up with female talent with approximately 30% of Top 100 places taken by female leaders. This includes a striking improvement in the technology sector with a rise of 13 percentage points this year, bringing the sectors female representation at the Top 100 level up to 29.5%. This year has also been a rise in the number of females holding Executive and Non-Executive Director roles, which reflects the recent Hampton Alexander Review findings that the number of women on FTSE 100 boards is rising.

On the other hand, perhaps our most significant finding is that the black, Asian and minority ethnic (BAME) pipeline appears to be leaking badly. The minority percentage in our principal pipeline measure - the Top 100 - has fallen. In some sectors there were already few minority leaders; this years survey shows that more than half of industry sectors have seen a fall in the proportion of Top 100 leaders from BAME backgrounds.

However, the deficit does not apply to all minority groups. Whilst the proportion of the Asian-heritage leadership pipeline is roughly in line with their presence in the workforce as a whole (7.5% compared to 7.3%), alarmingly, black executives are less than half as numerous as they should be (1.4% compared to 3.6%). Detailed analysis shows that men of colour are, when compared to men overall, even less likely to make the executive ranks than women of colour.

In short, the future leadership of Britains top companies, may be marginally less male, but it is also looking whiter; the snow line, rather than receding upwards, is edging down the corporate mountain.

How can FTSE 100 companies address this ongoing imbalance? Whilst most organisations better understand the commercial and reputational impact a lack of diversity can bring, now is a crucial time to address the pragmatic steps to build a strong pipeline of future leaders.

The first step is to challenge well-meaning, but generalist policies and programmes. Specialist programmes to eliminate bias and discrimination require data and behavioural evidence to be accepted as sustainable and successful.

This extends into ethnic pay gap reporting. We welcome recent announcements by the Prime Minister, Theresa May, to explore this in the UK, noting that the mandatory filing of data on status and pay by ethnic group, is already required in the USA by every large company and public body.

Compensation for company Chairs and Senior Independent Directors should be tied to meeting pay gap and Parker Review targets. Chairs should also be held accountable for the governance of diversity initiatives that protect organisations staff, customers and brands to a level that surpasses the beady eyes of tomorrows institutional investors.

In 2003, the National Football League introduced a policy called the Rooney Rule, requiring sporting authorities to interview at least one BAME applicant when recruiting for senior positions. Introducing a similar rule for all at FTSE 100 internal hires with a salary above 60,000 will ensure there is always at least one BAME candidate for every senior job opportunity. Choosing to work with suppliers and partners who themselves have diverse boards will also help to drive change across entire industry sectors, whether thats professional services, financial services or logistics.

Above all, organisations need to establish governance structures to appeal to the widest possible talent pool and to ensure an inclusive environment.

If progress was this slow in any other function, would we be reacting in the same way?

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ETHNOCULTURAL

Only 7.6% of the FTSE 100 most senior roles (Chair, CEO & CFO) are held by women

The number of female CEOs six remains the same as in 2017

Just 10 CFO positions are held by women, down from 12 in 2017

There is a small increase in the number of female Chairs, from five to seven

The proportion of female Non-Executive Directors in FTSE 100 companies is now approaching 40%; the female share of Executive Director roles is just 21.8%

28.8% of the leadership pipeline, Top 100 level, are female, 1.2 percentage point more than last year

White executives hold 96.7% of Top 3 roles in FTSE 100 companies, compared to 3.3% held by BAME leaders

There are five BAME CEOs and three BAME CFOs of FTSE 100 companies, both increasing by one from last year. The number of BAME Chairs has fallen from three to two

The number of BAME Non-Executive Directors has reached double digits for the first time

Following a substantial rise in 2017, from 5.7% to 10.7%,the proportion of our pipeline measure, the Top 100, held by people of colour has declined again to 10.6%

EXECUTIVE SUMMARYGreen Parks annual reports into the composition of the top 10,000 roles in the FTSE 100 are part of our contribution to enabling greater transparency in the corporate sector. They provide benchmarks showing the current state of diversity on boards of the largest companies listed in the UK, but also how it has changed year-on-year.

The report analyses diversity at three key leadership levels, referred to as the Top 3, Top 20 and Top 100. The Top 3 includes Chair, CEO and CFO roles, while the Top 20 consists of Board, including Chair, CEO and CFO, in addition to the Executive Committee. This is further broken down to an analysis of Executive and Non-Executive Director level. The Top 100 level represents the leadership pipeline and therefore analyses senior leaders who report into the Top 20.

This is the fifth year of the Green Park Leadership 10,000 report. Its clear from this years findings that while there is an increase in gender diversity at Executive and Non-Executive Director level, any progress made by FTSE 100 companies to improve the pipeline of ethnically diverse leaders has stalled over the past 12 months.

GENDER

96.7% OF TOP 3 FTSE 100 ROLES ARE TAKEN BY WHITE EXECUTIVES.

KEY FINDINGS

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ETHNOCULTURAL

3.3%BAME

7.6%FEMALE

8.8%BAME

26.3%FEMALE

10.6%BAME

28.8%FEMALE

GENDER

TOP 3

TOP 20

TOP 100

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At 33.7%, Retail has the highest female representation at Top 20 level, 4.2 percentage points higher than in 2017

The sectors progress is even greater at Top 100 level, with female representation rising to 40.6% (10.5 percentage points up on 2017)

At Top 100 level Media remains the most female friendly sector; 44.5% of its pipeline layer are women

Technology saw the biggest rise in female leaders at Top 100 level with an increase of 13.4 percentage points

At Top 20 level, ethnocultural diversity is highest in the Health sector; Banking & Finance and Professional & Support Services showed the biggest increase from last year

For the third year running, the Transport sector has no BAME leaders at Top 20 level

More than half of industry sectors have seen a reduction in the proportion of Top 100 roles taken by BAME leaders

The Telecoms sectors pipeline is one of the most disappointing findings, with a 16.1 percentage points fall in ethnic minority leadership

TOP

20

HIGHEST REPRESENTATION LOWEST REPRESENTATION

TOP

100

22.5% 44.5% 4.3% 17.5%

HEALTH TRANSPORT

HEALTH CONSTRUCTION & PROPERTY

RETAIL NATURAL RESOURCES

MEDIA INDUSTRIALS

INDUSTRY SECTOR

17.5% 33.7%BAME FEMALE

BAME FEMALE

0%BAME

20.7%FEMALE

BAME FEMALE

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This report examines the backgrounds of 10,660 individuals in total1. Data is cross analysed using several sources, many of which are publicly available including annual reports, London Stock Exchange listing information, company websites and LinkedIn.

The aggregate analysis of the cohort by gender and ethnocultural background is derived from a unique program designed by Professor Richard Webber, best known as the lead developer of two of the most commonly used consumer classification systems in the world; Mosaic and Acorn.

This software uses a database of 1.2 billion individual records globally. It uses 2.5 million family names and 0.8 million personal names to generate algorithms that can associate individual names to key protected characteristics, namely gender, and ethnic or national (ethnocultural) origins.

The software is tested annually against multiple samples where the ethnic and/or gender composition is known through other methods and has achieved accuracy of more than 95%. For example, against a file of 40 million British adults, the software produces a population breakdown materially similar to that of the 2011 census.

In some respects, the breakdown differs slightly from other published reports. This is because both the census and most published surveys rely on a process of self-declaration which, in the case of ethnocultural origin, suffer from several defects including partial or incorrect returns and differential rates of return by various ethnic groupings. In the case of the census in both the USA and the UK, research shows that many individuals change their classification over time, for example, from mixed to White British making comparisons over time unreliable. In the USA recent research from Pew suggests that one in seven young Americans of Hispanic background do not self-identify as Hispanic at all, though in practice they would be treated as part of the ethnic group by others.2

The database used in this report is unaffected by any of these difficulties, allowing us to make consistent comparisons year-on-year. In the case of the executive level employees considered in this report, virtually all names are published on the relevant organisations website or annual report. Additionally, where possible, program results will always have been validated through alternative methods too.

Figures throughout this report have been rounded to one decimal point. In some cases, this has resulted in percentage totals very slightly above or below 100%.

This years report contains the same data groupings as the 2017 edition and covers the leadership of the UKs largest quoted companies, the FTSE 100. We have split senior leaders into three tiers of seniority:

Top 3: Chair, CEO and CFO

Top 20: Board, including the Top 3, and the Executive Committee.

Top 100: Senior leaders who report into the Top 20.

One person who holds multiple posts is counted as multiple individuals. Dependent on individual organisational structure, the Top 20 and Top 100 may consist of other senior leaders with appropriate seniority and responsibility to that tier. In some cases, this sometimes results in the total exceeding or falling short of 20 or 100 individuals.

METHODOLOGY

1 This report treats one individual holding two positions as equal to two individuals. 2 http://www.pewresearch.org/fact-tank/2018/09/13/key-facts-about-young-latinos/

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FOLLOWING A SUBSTANTIAL RISE IN 2017, THE PROPORTION OF OUR PIPELINE MEASURE HELD BY

PEOPLE OF COLOUR HAS DECLINED THIS YEAR TO 10.6%.

RESULTS & ANALYSIS

This recent analysis is correct as of Q3 2018. The previous analysis (used in the 2017 Green Park Leadership 10,000) is correct to Q1 2017. This report provides the most recent 2018 results whilst examining the changes which have occurred over previous years. Broadly speaking, the movement in gender balance and ethnocultural diversity since last year has been caused by two factors:

- Companies moving into and outside of the FTSE 100- Change within companies that have stayed within the FTSE 100

TERMINOLOGYOrigins can provide over 240 ethnocultural classifications. For the purposes of this report, these have been aggregated into five super-categories: three ethnic super-categories (1. White, 2. Black, 3. Chinese & Other Asian) and two ethnocultural/religious super-categories (4. Muslim and 5. Hindu & Sikh). Therefore, the term ethnocultural is used.

For ease of reference, below we show how the super-categories correspond to those used by the Office for National Statistics (ONS)3. In a few cases where a group is identified both by national and cultural signifiers a category has been chosen that most strongly predicts outcomes. For example, Indian Muslims are categorised in the broad group Muslim.

Statistically, groups of mixed heritage tend to be treated by the system as slightly more strongly related to male parental origin given that more people of mixed heritage are likely to adopt their paternal family name. However, the impact on Origins output is small, since some individuals will adopt the maternal family name; and in the UK, the proportion of individuals of mixed heritage, though growing, is still below 2% of the total population. Finally, the combination of personal and family name usually offers a strong indication of the most appropriate category.

Footnote3 http://www.ons.gov.uk/ons/guide-method/measuring-equality/equality/ethnic-nat-identity-religion/ethnic-group/index.html#1

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UK WORKING AGE POPULATION

The results of this report must be viewed with the context of the background of the countrys current ethnocultural composition.

In 2011, most of the UK population described themselves as belonging to the White ethnic group (87%, or 55 million). The remaining 13% (8.1 million) belonged to a minority ethnic group, representing one person in eight of the UK population.

Our database classifications - for both the overall and the working population - are consistent with those derived from the census.

ETHNOCULTURAL GROUP

Black Pakistani Indian ChineseAfrican Bangladeshi any other AsianCaribbean ArabBlack British

White

Chinese/other AsianHindu + SikhMuslimBlackWhite Unknown/other

87.2% 3.5%3.6% 0.6%3.8% 1.3%

Female Male

51% 49%

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TOP THREEThis is the first key senior tier that includes the high-ranking executives namely the Chair, CEO and CFO typically considered the most influential members of an organization. In most cases, these executives set the companys strategy, make higher-stakes decisions and ensure the day-to-day operations align with fulfilling the companys strategic goals.

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FIG 1. TOP 3 : ETHNOCULTURAL DIVERSITY

FIG 3. TOP 3 : ETHNOCULTURAL GROUP

FIG 2. TOP 3 : GENDER DIVERSITY

3.3% 7.6%

BAME: 2018 FEMALE: 2018

4As Fred Phaswana and David Williams both act as Co-Chairs of Mondi, the total number of Chairs throughout our analysis is 101.

ETHNOCULTURAL GROUP

2018 1.3% 1.9%

Black Muslim Hindu & Sikh Chinese & Other Asian

DESPITE PRESSURE FROM REGULATORS AND INVESTORS IN RECENT TIMES, FTSE 100 BOARDS REMAIN OVERWHELMINGLY MALE (92.4%) AND

WHITE (96.7%)

Looking at the combination of Top 3 level roles from an ethnic and gender diversity perspective, it is evident that despite pressure from regulators and investors in recent times, FTSE 100 Boards remain overwhelmingly male (92.4%) and white (96.7%).

Breaking this down by ethnocultural group, we can see the small BAME representation that does exist at Top 3 level includes no individuals from either the Muslim or Chinese/other Asian backgrounds.

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FIG 4. TOP 3 : ROLE COMPARISON : GENDER

FIG 5. TOP 3 : ROLE COMPARISON : ETHNOCULTURE

4As Fred Phaswana and David Williams both act as Co-Chairs of Mondi, the total number of Chairs throughout our analysis is 101.5As Martin Gilbert and Keith Skeoch both act as CEOs of Standard Life, the total number of CEOs throughout our analysis is 101.

2017

2017

2017

2017

2017

2017

FEMALE

2018

2018

2018

2018

2018

2018

7%

2%

7%

5%

10%

3%

5%

3%

5%

4%

12%

3%

BAME

Our Top 3 analysis4 shows a small increase in the number of female Chairs, from five to seven, with the addition of Annette Court at Admiral Group, Deanna Oppenheimer at Hargreaves Lansdown and Alison Carnwath at Land Securities. The number of female CEOs remains unchanged at six, with Carolyn McCall moving from easyJet to ITV, Emma Walmsley taking the top spot at GlaxoSmithKline and Moya Greene stepping down from the Royal Mail Group.

Despite five female CFO appointments, the number of women in CFO roles has fallen from 12 in 2017 to 10.

BAME CFOs remain at just three and there is a decrease in the number of ethnic minority Chairs, with Fred Phaswana and Said Darwazah now the only two BAME Chairs of FTSE 100 companies. However, our Chief Executive analysis5 finds a small rise, from four to five, in the number of BAME CEOs.

CHAIR

CEO

CFO

CHAIR

CEO

CFO

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TOP 20The Top 20 consists of the Board, including the Top 3, and the Executive Committee. This is broken down further in our analysis to Executive and Non-Executive Director level, excluding the Top 3. Dependent on individual organisational structure, the Top 20 tier and categories of Executive and Non-Executive Director may consist of other senior leaders with appropriate seniority and responsibility to that position. In some cases, this results in the total exceeding or falling short of 20 individuals.

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The increase in female Top 20 leaders noted in previous reports continues this year. This is particularly evident in the number of female Non-Executive Directors which is now approaching 40%. Unfortunately, the low proportion of female leaders in Executive Director, Chair, CEO and CFO roles means overall female representation is 26.3% which, despite a small increase on last year, is only just over half the comparative UK Working Age Population percentage of 51%.

The number of minority Executive and Non-Executive Directors in the Top 20 this year has increased, continuing the steady rise of previous years, with the number of BAME Non-Executive Directors having at last reached double figures.

FIG 6. TOP 20 LEVEL : GENDER DIVERSITY

2017

2018

2018

ALL TOP 20 LEVEL

NON-EXECUTIVE DIRECTOR

EXECUTIVE DIRECTORS

2018

2017

2017

26.3%

35.0%

17.2%

24.3%

38.9%

21.8%

FEMALE

THE OVERALL PERCENTAGE OF TOP 20 MINORITY LEADERS IS ONLY 8.8%. AS WITH FEMALE TOP 20 LEADERS, OVERALL REPRESENTATION IS REDUCED BY THE LACK OF

BAME LEADERS IN THE TOP 3 MOST SENIOR ROLES

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Despite the proportion of BAME Top 20 Executive Directors standing at 9.3% and Non-Executive Directors at 10.5%, the overall percentage of Top 20 minority leaders is only 8.8%. As with female Top 20 leaders, overall representation is reduced by the lack of BAME leaders in the Top 3 most senior roles.

Origins technology enables us to further analyse the 8.8% of BAME leaders at Top 20 level and group by ethnic background. In line with the general moderate increase in diversity at Top 20 level, there has been a rise in the proportion of senior roles taken by all ethnocultural groups. Outside of the White group, Hindu & Sikh are the most well represented ethnocultural group at Top 20 level.

FIG 8. TOP 20 LEVEL : ETHNOCULTURAL DIVERSITY BY ETHNOCULTURAL GROUP

FIG 7. TOP 20 LEVEL : ETHNOCULTURAL DIVERSITY

2017

2018

2018

ALL TOP 20 LEVEL

EXECUTIVE DIRECTORS


2018

2017

2017

8.8%

6.5%

7.9%

7.1%

9.3%

10.5%

BAME

ETHNOCULTURAL GROUP

2.5% 1.9% 2.6% 1.7%

3.4% 2.4% 2.0% 2.8%

2.2% 2.4% 3.5% 1.4%

2018

2018

ALL TOP 20 LEVEL


EXECUTIVE DIRECTORS

2018


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TOP 100The Top 100 analyses senior leaders who report into the Top 20 employees and represents the internal pipeline of tomorrows senior executives. These individuals rank from Department Head level to Executive Vice-President, with a range of Director and Vice-President related job titles making up the numerical majority. One person who holds multiple posts is counted as multiple individuals.

This data set totals 8,904 individuals and does not incorporate the individuals counted amongst the Top 3 and Top 20 leaders. Dependent on the individual organisational structure, in some cases, the total may exceed or fall short of 100 individuals.

17

Slow but steady progress continues to be made in the representation of female leaders in the Top 100 pipeline, now at 28.8%. However, following last years survey of ethnic diversity in the Top 100, which saw numbers almost doubling from 5.7% to 10.7%, progress has stalled and, in fact, declined to 10.6% in 2018.

While all ethnic groupings achieved a significant increase in last years Top 100 analysis, this years figures show that only the Black grouping grew in number, albeit by a small proportion. The number of Hindu & Sikh leaders remain unchanged and the proportions of both Muslim and Chinese and other Asian leaders have decreased.

ETHNOCULTURAL DIVERSITY

FIG 9. FTSE 100 TOP 100 LEVEL : GENDER DIVERSITY

FIG 10. TOP 100 LEVEL : ETHNOCULTURAL DIVERSITY

FIG 11. TOP 100 LEVEL : ETHNOCULTURAL DIVERSITY BY ETHNOCULTURAL GROUP

ETHNIC GROUP

1.4% 2.8% 4.7% 1.6%

1.1% 3.2% 4.7% 1.8%

2018

2017

2017

2017

2018

2018

28.8%

10.6%

27.2%

10.7%

FEMALE

BAME


18

COMBINED ANALYSISAre minority men and women compared to their gender peers - equally likely to be FTSE 100 leaders? We have presented totals for gender and race separately so far. However, it is far from clear which of these factors matters more in inhibiting an individuals career progress.

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Looking at the Top 100 level, BAME males hold 7% of the roles which is over double the proportion held by BAME women at 3.2%. White females fill just over a quarter of the roles at 25.6%, while white males hold almost two thirds of the leadership pipeline roles at 63.4%. At the more senior level of Top 20 roles, the share of all roles decreases for BAME females, BAME males and white females, while the share taken by white males increased to 68.1%.

*0.8% were unknown

BAME

BAME

WHITE

WHITE

FIG 12. COMBINED ANALYSIS 2018

TOP 20

TOP 100*

5.6%

7.0%

3.1%

3.2%

23.2%68.1%

63.4% 25.6%

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FIG 13: COMBINED ANALYSIS BY GENDER GROUP

However, to assess the impact of race as an isolated factor, we have also compared men of colour with white men; and women of colour with white women. As in previous years, we have tracked this at both the Top 20 and the Top 100 level and are able to show how this has changed over the last 12 months.

In the Top 20, both BAME men and women have increased their presence relative to their white peers, though by this measure, BAME men still lag behind BAME women.

In the Top 100, the ethnic differential in each gender category has widened; in essence the executive pipeline is becoming more white, rather than less.

COMBINED ANALYSIS BY GENDER GROUP

MALE MALEFEMALE FEMALE

MALE MALEFEMALE FEMALE

WHITEBAME

TOP 20

2017

2018

TOP 100

6.4%

10.0%

10.4%

7.7%

9.4% 11.2%

11.9%

93.6% 90.6% 89.6% 88.8%

92.3% 88.1% 90.0% 89.9%

11.1%

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SECTOR ANALYSISOur analysis of change by industrial sector has been built from our previous years research to show the collective industrial movement by sector.

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Despite high profile initiatives to increase gender diversity at the top levels of FTSE 100 companies, seven of the 15 sectors analysed for this report saw a reversal in the number of women in the most senior roles. Media saw the greatest decrease of 4.2 percentage points.

This was balanced by positive growth in the proportion of Top 20 roles taken by women in sectors such as Transport, Health, Retail and Construction & Property. The net movement for the Top 20 is plus 2%, just under the equivalent figure in last years report (2.3%).

TOP 20 GENDER

Banking & Finance

Construction & Property

Consumer Goods

Engineering

Health

Industrials

Leisure

Media

Natural Resources

Professional & Support Services

Retail

Technology

Telecoms

Transport

Utilities

FEMALE

+1.4%

+4.9%

-1.0%

-1.2%

+9.9%

+4.7%

+4.9%

-0.3%

-4.2%

+2.0%

-0.3%

-1.5%

-1.8%

+1.6%

+8.7%

FIG 14. TOP 20 LEVEL : SECTOR GENDER DIVERSITY

30.8%

23.2%

24.7%

20.7%

33.7%

23.5%

26.0%

32.4%

31.1%

24.6%

22.0%

30.6%

26.4%

25.7%

26.7%

2018 2017 Yearly increase/ decrease

0% 10% 20% 30% 40% 50%

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Three sectors saw a fall in ethnic diversity at Top 20 level: Construction & Property, Industrials and Retail. The sectors with the biggest increases in ethnic diversity were Banking & Finance, Professional & Support Services and Leisure. Transport continues to have no BAME representation at Top 20 level.

The increase in BAME leaders at Top 20 level (1.7%) has accelerated compared to last years movement of 0.5%, but at its current level of 8.8% is still not representative of the UK BAME population of 13%.

TOP 20 - ETHNOCULTURAL

17.5%

1.2%

9.0%

9.8%

3.1%

11.8%

4.0%

0%

0% 5% 10% 15% 20%

2.7%

4.9%

8.0%

Banking & Finance


Consumer Goods

Engineering

Health

Industrials

Leisure

Media

Natural Resources


Retail

Technology

Telecoms

Transport

Utilities

BAME

+4.0%

-4.0%

+2.8%

+1.9%

+2.8%

-3.4%

-1.7%

+3.0%

+0.5%

+3.9%

+1.4%

+2.4%

+0.2%

0.0%

0.0%

2.2%

12.8%

FIG 15. TOP 20 LEVEL : SECTOR ETHNOCULTURAL DIVERSITY

7.1%

13.0%


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FIG 16. TOP 20 LEVEL : ETHNOCULTURAL DIVERSITY BY ETHNIC GROUP (2018)

Figure 22 demonstrates the ethnocultural diversity of the senior leadership at Top 20 level by ethnic group and industrial sector.

One of the most underrepresented group of BAME senior executives in this years report continues to be Chinese and other Asian. Six out of 15 industry sectors have no Chinese and other Asian executives at this level, an improvement of one sector when compared to last years analysis. This figure is equalled by black leaders who are also untenured in six sectors.

Muslim and Hindu & Sikh leaders fare slightly better, with representation in 11 and 12 respectively out of 15 sectors.

TOP 20 - ETHNOCULTURAL GROUPING

5.8%

3.1%

1.4%

1.2%

3.4%

5.2%

1.0%

2.9% 2.9%5.9%

4.0%

0%

1.4%

1.4%

2.3%

1.6% 1.6% 1.6%

8.4%

2.2%

2.9%

2.1%

2.0%

1.0% 1.0%

1.4%

3.1%

1.5%

3.8%

2.2%

4.3%

1.6%

3.0%

2.5%

0.7%

3.8%

1.4%

1.1%

1.0%

3.0%

Banking & Finance


Consumer Goods

Engineering

Health

Industrials

Leisure

Media

Natural Resources


Retail

Technology

Telecoms

Transport

Utilities

ETHNIC GROUP


6.8%

25

Four in 15 sectors have demonstrated a reversal in the proportion of women taking Top 100 roles, compared with seven sectors at the more senior level of Top 20 roles.

Sectors that have increased the number of female leaders in their leadership pipelines include Technology, Engineering, Retail and Telecoms, whilst Construction & Property, Health, Transport and Utilities have seen a fall in female participation.

TOP 100 GENDER

0% 10% 20% 30% 40% 50%

Banking & Finance


Consumer Goods

Engineering

Health

Industrials

Leisure

Media

Natural Resources


Retail

Technology

Telecoms

Transport

Utilities

FEMALE

+1.8%

-4.8%

+0.6%

+8.5%

-0.5%

+2.2%

+10.5%

+1.7%

+5.7%

+3.3%

+13.4%

+6.8%

-0.3%

+2.5%

-0.7%

FIG 17. FTSE 100 TOP 100 LEVEL : SECTOR GENDER DIVERSITY

30.2%

17.5%

32.8%

23.4%

40.6%

29.9%

29.5%

28.2%

27.7%

28.2%

29.2%

27.4%

44.5%

32.3%

20.0%


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More than half of the sectors analysed for this years report have seen a reduction in the proportion of Top 100 roles held by BAME leaders. While there was an increase of 1.7 percentage points in the number of Top 20 roles, the fact the proportion of BAME executives in the pipeline that feeds into the C-Suite has reversed in nine out of 15 sectors, does not augur well for the future. The problem is particularly acute in the Telecoms sector, which has experienced a 16.1 percentage point fall in the proportion of BAME Top 100 leaders.

With Transport having no BAME leaders at Top 20 level and only 4.9% in the leadership pipeline, 2.5 percentage points less than 2017, the sector may be storing up significant problems for the future.

TOP 100 ETHNOCULTURAL

0% 10% 20% 30%

Banking & Finance


Consumer Goods

Engineering

Health

Industrials

Leisure

Media

Natural Resources


Retail

Technology

Telecoms

Transport

Utilities

BAME

-1.5%

-0.1%

+0.1%

-0.5%

+4.2%

+2.8%

-0.1%

-1.8%

-1.5%

-0.4%

+0.4%

-16.1%

+2.8%

+4.0%

-2.5%

FIG 18. TOP 100 LEVEL : SECTOR ETHNOCULTURAL DIVERSITY

22.5%

9.3%

6.6%

13.2%

7.4%

10.0%

8.5%

4.9%

7.3%

7.9%

9.0%

13.7%

8.5%

11.1%

4.3%


27

FIG 19. TOP 100 LEVEL: ETHNOCULTURAL DIVERSITY BY ETHNIC GROUP (2018)

Figure 21 demonstrates the ethnocultural diversity of the senior leadership pipeline, Top 100, by ethnic group and industrial sector.

In every industry sector all ethnocultural groups are represented at the Top 100 level, except Engineering which has no black leaders at this level and Transport which demonstrates a lack of Chinese and other Asian leaders.

Businesses show little sign of addressing the underrepresentation of Chinese and other Asian leaders in general, with only three sectors - Banking & Finance, Consumer Goods and Health - recording 2% or more of their leadership pipelines in this category.

TOP 100 - ETHNOCULTURAL GROUPING

1.5%

1.1%

1.6%

1.1% 4.1% 2.4% 1.7%

1.6%

4.9%

0.9% 2.0% 4.8% 1.4%

1.0%

0.5% 6.0% 3.0% 0.5%

1.2% 1.2% 2.5%

1.4%

3.3%

3.1%

2.9% 3.2% 1.8%

6.8%

1.8%

1.0%2.0%

3.1%

3.0% 4.0% 0.5%

1.4% 4.3% 0.2%

2.3%

0.9%

4.9%

2.0%

4.5%

3.6%

6.6%

1.5%1.0% 1.0%

2.0%

3.3%10.8%

1.2%

1.5%

1.4%4.2%1.2%0.6%

Banking & Finance


Consumer Goods

Engineering

Health

Industrials

Leisure

Media

Natural Resources


Retail

Technology

Telecoms

Transport

Utilities

ETHNIC GROUP


1.0%

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TREVOR PHILLIPS Chair | Green Park

AT A TIME WHEN OUR COUNTRY NEEDS TO SHOW A MODERN, GLOBAL FACE TO THE WORLD, DECLINING

ETHNIC DIVERSITY IN OUR BUSINESS LEADERS LOOKS LIKE A SPECTACULAR OWN GOAL.

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AFTERWORDThis report is one of a series published by Green Park each year, charting leadership diversity in business, Government and the Third sector. The experience of our team is that providing more diverse talent to our clients raises the quality and reduces the overall cost of the talented people we bring to them.

When we first decided to collect data we assumed that we would, over time, be charting a more or less steady rise in female and minority participation at the top of our great firms as the broad logic of diversity kicked in. We have invested heavily in meeting the demand for diversity in leadership, not just of gender and background, but variety of experience perspective and character.

This latest survey shows that to some extent we were correct to focus on these factors, and that we and others have had some success, with increasing the presence of women in the top ranks. But they also show that some sectors have a great deal of catching up to do and, in particular, that Britain still has to have a serious and courageous conversation about race and ethnicity. At a time when our country needs to show a modern, global face to the world, declining ethnic diversity in our business leaders looks like a spectacular own goal.

We believe that the role of a talent partner such as Green Park is not simply to reflect our clients current desires. We aim to show our clients the world as it really is and, crucially, to offer them alternatives that will improve their own performance, raise their productivity and better connect them to their own workforces and their customers.

Some steps are obvious indeed so obvious that it is a mystery that, so few recruitment consultancies take them. For example, Green Park has recognised its vital to cultivate a strong network of BAME and female candidates. This October we presented our list of 100 BAME board-ready leaders at the House of Commons, potentially opening up risk to our business but also demonstrating our commitment to helping build true diversity at the most senior levels in business.

However, we also believe that the UK needs fresh thought and innovation if it is to meet the challenges ahead. That is why we are investing heavily in new datadriven methodologies to support our clients make the most of their greatest assets: their people. Additionally, we are working with Government and our strategic clients to develop ways of bringing forward more of the missing minorities both preparing them to lead, and helping their organisations gain insight into the special qualities that different can bring to the table.

As ever, we remain keen to work in partnership with anyone who believes in the dividend that greater diversity delivers to businesses. No individual, company, or indeed Government will achieve change alone, but a concerted effort just might.

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ABOUT THE AUTHORS

TREVOR PHILLIPSCHAIR | GREEN PARK

Trevor Phillips is Chair of Green Park and is also a former President of the John Lewis Partnership Council.

The Founder Chair of the Equality and Human Rights Commission, he acts as an advisor to several companies and Not-For-Profit bodies. He is Chair of the WEA, the UKs largest voluntary sector provider of adult education.

Trevor retains an active interest in the Arts and Music and serves as a Board member of the Social Mobility Foundation, and of the Employers Network for Equality and Inclusion. He is a Fellow of the Migration Policy Institute (Washington DC) and Chair of the New York-based Centre for Talent Innovation. He is the recipient of several honorary doctorates, the OBE and is a Chevalier de la Legion dHonneur.

RAJ TULSIANICO-FOUNDER & CEO | GREEN PARK

Raj Tulsiani is one of the UKs leading figures in executive Search and interim management with over 20 years experience supporting the needs of a diverse range of organisations.

Rajs leadership has driven Green Park Interim & Executive Search to the forefront of industry standards for customer service and innovation, achieving a rank of No. 1 in the Hot 10 Public Sector Providers & No. 4 in the Recruiter Hot 100 2018. The company has also regularly achieved recognition in the National Business Awards, Recruiter Awards for Excellence, and Recruitment International Awards.

Raj is a passionate advocate of the power of diversity as a source of competitive advantage, heading a team that sets the benchmark for innovation and commitment to consistently attracting diverse groups of appointable candidates. In 2017, Raj was the recipient of the Global Equality and Diversity Awards Lord Noon Award for his commitment to increasing boardroom diversity.

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JO HEATHHEAD OF DIVERSITY & INCLUSION PRACTICE | GREEN PARK

Head of Diversity & Inclusion Practice, Jo Heath heads up Green Parks Diversity and Inclusion Practice. She is an equality Law improvement Professional and a Diversity And Inclusion (D&I) Auditor, working in this field for over 20 years.

She has worked with global organisations in the Private, Public, and Third Sectors carrying out complex inclusion audits and cultural impact assessments. Her clients have included Linklaters LLP, HSBC, Santander, Ernst & Young, Office for National Statistics, The Home Office, Amnesty International, BT Group, Vodafone, Hays Recruitment, EDF Energy, Yorkshire Water and Harvey Nash.

She advises on all equality legislation related issues and designs and delivers a range of cultural initiatives, leadership programmes and diversity and inclusion solutions for businesses.

PAO SANGSUWANDIVERSITY & INCLUSION PROJECT MANAGER | GREEN PARK

Diversity & Inclusion Project Manager, Pao Sangsuwan has a successful track record of helping Government and FTSE companies deliver their strategic objectives through increasing inclusive practices and improving their organisational culture.

He leads the Green Park Research and Analytics team, ensuring year-on-year success of the Leadership Series and benchmarking, data, insight and analytics exercises.

Working with world class Universities and organisations to deliver social inclusion programmes, Pao has led projects specifically aimed at educational policy reforms, empowering women, young people, and NEETs, and overseen the logistics and delivery of high-level international programmes for EU funded projects in Turkey, Italy and Germany. From the research stage to the implementation of policies, Pao has created and delivered career education programmes and guidance schemes in Europe to help educators across Europe become effective career advisers in vocational education training and career guidance.

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INTERIM MANAGEMENT | EXECUTIVE SEARCH | BOARD & ADVISORY | DIVERSITY PRACTICE | PEOPLE SOLUTIONS

WE ARE NOT JUST THOUGHT LEADERS, WE ARE THOUGHT ARCHITECTS

Our clients stay ahead of the curve through our market-led and pioneering insights.

TOP 100 BAME LEADER IN BUSINESS

2018

BAME 100 BOARD TALENT INDEX 2017

THINKING DIFFERENTLY ABOUT

DIFFERENCE

THIRD SECTOR LEADERSHIP 2,000

2018


THE DNA OF THE RETAILERS OF TOMORROW

LOCAL GOVERNMENT LEADERSHIP 2018


DRIVE: MILLENNIAL EMPLOYER BRAND

LOYALTY

THE COUNTDOWN TO GDPR: A 10 MINUTE

GUIDE FOR THE BUSY EXECUTIVE

DRIVE: SUPPLIER DIVERSITY PART ONE

DRIVE: CHANGING THE FACE OF

BRITAINS LEADERS

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Green Parks research has found a distinct lack of an ethnic minority representation in senior leadership positions, as black, Asian and minority ethnic (BAME) professionals still face a number of challenges and barriers in and out of the workplace. At Green Park, it is our mission to break down these barriers.

FOR OUR TOP 100 BAME LEADERS IN BUSINESS INDEX, VISIT GREEN-PARK.CO.UK/BAME100

Our Top 100 BAME Leaders in Business report is designed to showcase the talent, experience and expertise of ethnic minority board-ready leaders who are chronically underrepresented in most of Britains biggest organisations across the Private, Public and Third sector organisations. It is also the recognition and celebration of much-needed role models who lead by example, driving social and cultural change by actively reaching out to communities, using their skills and networks to transform lives.

DIVERSITY IS BRITAINS GREATEST STRENGTH AND SHOULD BE OUR SECRET WEAPON IN INCREASING OUR COMPETITIVENESS IN GLOBAL MARKETS AND DRIVING

TRANSFORMATION IN OUR ORGANISATIONS.

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THIRD SECTORLEADERSHIP2,000 2018

KEY FINDINGS More than a third (34) of the largest 100 UK charities by turnover have no ethno-

cultural diversity in their senior leadership team

Only 8.1% of senior positions in the largest 100 UK charities are held by ethnic minority leaders and at the most senior level of Chair, CEO and CFO this drops to 6.2%

While 41% of senior positions in the top 100 UK Charities are held by women, fe-male representation in the Top 3 roles of Chair, CEO and CFO is significantly less at just 27.5%

Women hold just 23% of Chair positions across the largest 100 UK charities

This is the fourth year of the Green Park Leadership Series, and the first Leadership 2,000 report specifically written for the Voluntary Sector.

It is a companion study to our 2017 Thinking Differently About Difference report and part of a widerseries based on the work and outputs of Green Park as we look to change the face of work by helping people think differently about talent.

Download the Third Sector Leadership 2,000 report at green-park.co.uk/insights

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LOCAL GOVERNMENT LEADERSHIP 2018

KEY FINDINGS Limited progress for women at Top 20 level in Unitary Authorities and County

Councils and a fall in the number of women in senior management positions in Metropolitan Boroughs and London Boroughs.

There are only 10 black, Asian and minority ethnic (BAME) CEOs across all Unitary Authorities, County Councils, District Councils, Metropolitan Boroughs and London Boroughs.

Despite London having a population that is 40% non-white, only two of Londons 32 Boroughs have BAME CEOs. Yet progress is being made in the representation of BAME people at Top 20 level in London Boroughs with a 4.9 percentage point increase from 5.6% in 2017 to 10.5% today.

This is the fourth year of the Green Park Leadership Series, and the first Leadership report specifically written for Local Authorities. It follows on from the 2017 Leadership 5000 report analysing gender and ethnocultural diversity across the Public Sector including Local Government. This report analyses both Chief Officer and Chief Executive roles across all English Local Authorities. The purpose is to monitor diversity trends within senior leadership, enabling Authorities to measure their progress in creating increasingly inclusive senior teams that reflect their wider workforces and the communities they serve.

Download the Local Government Leadership 2018 report at green-park.co.uk/insights

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LEADERSHIP10,0002017

KEY FINDINGS 2017 Ethnic diversity in leadership pipeline within FTSE 100 companies increased to

5%, the highest level for four years.

Six-in-10 (58%) main boards had no ethnic minority presence, despite the Governments Parker Review recommending no FTSE 100 board should be exclusively white by 2021.

Gender diversity in leadership was now moving backwards in more industries than it was moving forward.

Green Parks reports into the composition of the top 10,000 roles in the FTSE 100 are part of our contribution to greater transparency in the corporate sector. This year will mark our fourth Leadership 10,000 report and the second time that we have included the Leadership Diversity Index, ranking the FTSE 100 companies by the ethnocultural and gender diversity of their leadership team.

This year our report will continue to monitor the progress of gender and ethnocultural diversity within the FTSE 100, drawing comparisons with our 2017 Third Sector and Local Government Leadership research series.

Download the Leadership 10,000 2016/2017 report at green-park.co.uk/insights

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A diverse approach to

ExEcutivE SEArch | intErim mAnAgEmEnt | BoArd AdviSory | divErSity conSultAncy | PEoPlE SolutionS

A diverse approach to executive searchA diverse approach to interim managementA diverse approach to leadership developmentA diverse approach to talent pipelining and attraction

So we do things differently

[email protected] +44 (0)20 7399 4300

You cant do the same things and expect different results.

With over a decade of experience in moving the diversity dial, Green Park has become one of Europes most trusted providers of Executive Search, Interim Management, Board Advisory and Diversity solutions across the Private, Public and Third Sectors. Championing diversity and inclusion, Green Park is changing the face of leadership by helping organisations think differently about talent.

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Our dedicated Diversity and Inclusion (D&I) Consultancy assists clients externally to increase their diversity maturity and proficiency.

Our Green Park team of experts provide the opportunity for organisations to build their internal capability and subject matter expertise. We support organisations to progress and achieve their (D&I) aspirations, to better understand the impact that its diversity initiatives have had and enable businesses to both re-prioritise activi-ties and rationalise their spend.

By combining our expertise, we will conduct a tactical review of your current D&I statement, strategy and ap-proach including:

Critical Friend Approach

Analysis of Current Diversity Metrics

Prioritisation of Activities

Creation of Action Plan & Targeted Aspirations

DIVERSITY & INCLUSIONCONSULTANCY

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DIVERSE TALENT MAPPINGIdentifying and recruiting the most diverse and high potential talent is crucial to leaders and significant commitment has been demonstrated by many organisations to ensure that they meet or exceed their diversity aspirations. For many organisations D&I is now considered a strategic priority and many are aligning this to a clear ambition to become a leading employer of choice. Green Park is an experienced organisation that supports businesses in identifying talent within and outside of your industry thereby achieving diverse talent in terms of background, exposure/experience, and skill. We build new talent pools that will be required in the future, by identifying and mapping the skills, knowledge and attributes required to support your structure. We create the workforce plan applying a D&I lens, sourcing the leadership team for senior or Board hires and also offer volume recruitment solutions.

DIVERSITY DRIVERS DIAGNOSTICAn independent diagnostic review of an organisations current and emerging D&I strategy and approach. The review will seek to identify leading practice areas of improvement and will map out the internal capability/resource required in order for the business to achieve its D&I aspirations. Using a transparent framework, proven diagnostics and benchmarking methods, we help our clients identify improvement areas with the most significant impact on their attraction and retention practices, employee experience, levels of engagement, performance and progression.

ETHNIC & GENDER PAY GAPWe work with our clients to prepare for reporting by development data collection systems and creating the aligned communication strategy to enhance disclosure. We use our ethnic diversity sourcing tool to help map ethnic data to pay and create monitoring platforms. We assist organisations by carrying out job evaluation and mapping activities, analysis and reporting. We also create gender and ethnic diversity action plans to mitigate/reduce any identified gap.

TALENT ATTRACTION & SELECTION REVIEWActing as a strategic adviser and a critical friend, we conduct a holistic end-to-end review of an organisations current attraction and recruitment process, providing oversight and improvement recommendations. This seeks to identify any barriers to entry and accessibility for ethnic, female or disabled candidates. Our work captures data and insight for a broad range of diversity groups and uses fictitious profiles of diverse candidates to mystery shop the full process. Our work helps our clients understand drop-off points and gain qualitative feedback at all stages of their process. This provides insight into improvements required to mitigate bias, improve accessibility and remove barriers to attraction.

LEADERSHIP DEVELOPMENT & CAPABILITY BUILDINGWe design and deliver immersive leadership showcase sessions to increase understanding, buy-in and accountability from the senior leadership team. We also deliver inclusive leadership assessment and development programmes for mid-managers and hiring managers, exploring critical issues that could hinder or facilitate their organisations ability to become more diverse and inclusive and advance their D&I strategy at pace. Topics include: Assessing D&I Culture and Maturity; Leadership Ownership & Accountability; Sponsorship & Role Modelling; Defining D&I Strategic Priorities; Embedding Inclusivity & Leveraging Diversity; Engagement Strategies; Inclusive Decision-Making & Behaviours; Talent Attraction & Retention Strategies; Intersectionality Blind Spots, and Inclusive Futureproofing.

BUILDING TRUST & CONFIDENCE

MITIGATING BIAS

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A: 54 Brooks Mews, London, W1K 4EG WWW.GREEN-PARK.CO.UK+44 (0)20 7399 4300

Since our inception in 2006, Green Park has become one of Europes most trusted suppliers across the Private, Public and Third Sectors. We have 10 core practices dedicated to delivering right first time results across executive search, interim executive management and our consultancy practices in diversity and leadership development.

For over a decade, we have focused on building a company with a reputation for delivering results and customer satisfaction through collaborative and high-quality solutions. In doing this, we hold ourselves accountable for not only setting but meeting a higher standard.

A Diverse Approach to Leadership

Documents

LEADERSHIP 10,000 2018 - green-park.co.uk · 3 FOREWORD The effort of the past few years to improve leadership diversity in FTSE 100 companies is paying off - but only if you’re