A progress report published by the Cranfield School of Management this week confirmed that the FTSE 100 is collectively on track to meet its 25 percent target for women on boards by 2015. This suggests that self-regulation for women in the boardroom (a key recommendation of Lord Davies Woman on Boards report) is working. Article by Sophie White, employment law partner at Abbiss Cadres LLP.
Can the same principle of self-regulation be applied to ethnic minorities? Business secretary Vince Cable thinks so. He has launched a campaign to bring more ethnic minorities into Britain’s boardrooms, with the aim of eventually having one in five directors from a non-white background. He is working with Trevor Philips, chairman of the Equality and Human Rights Commission and Lenny Henry to ensure leading UK-listed companies promote and hire black and Asian people on to their boards.
His pledge is bolstered by Chuka Umunna, the shadow Business Secretary, who has also promised to set up a review into ethnicity in boardrooms along the lines of the Davies Review, if he is appointed Business Secretary next year. But are all types of discrimination equal? Would self-regulation work for race discrimination in the same way it appears to be working for sex discrimination? There is no doubt that ethnic minorities are seriously under-represented in business with just 1 in 16 senior management jobs occupied by ethnic minorities. Worse still, a study of the top 10,000 executives in Britain co-authored by Trevor Philips 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.
However, targets or quotas for ethnic minorities are not as straight forward as they are for gender. In gender there are only two choices; man or woman. If self-regulation or regulated quotas are introduced for ethnic minorities how would the target be met? Would it be sufficient to say that x percent of boards should be ethnic minorities without any regard for the different ethnic minorities in society? Surely not, as this approach would fail to ensure that boardrooms genuinely mirrored the general public. Another issue is how ethnic minority targets would impact gender targets. Would an ethnic minority woman count towards both targets?
These issues need to be addressed before politicians begin to grapple with the underlying legal question about how Vince Cables campaign sits with the prohibition on positive discrimination under the Equality Act 2010. Under current UK law there is a limited exception for positive action in recruitment. Section 159 of the Equality Act 2010 states that employers can choose to use ethnic minority quotas in recruitment and promotion, provided they can demonstrate that the successful candidate is from a protected group that is disadvantaged or under-represented, and that the candidate is “as qualified as” any other eligible applicant. However, it is not clear how the “as qualified as” test works and in practice relying on this exemption may expose an employer to litigation by unsuccessful non ethnic minority candidates.
Advocates of ethnic minority quotas may point to the success of the introduction in the US NFL of the Rooney rule. However evidence from the US makes clear that the Rooney rule only helped drive ethnic minority equality within the NFL when it was coupled with other positive measures. Following this example it is likely that real change will only come from winning the hearts and minds of big business and by ensuring that high achieving ethnic minority candidates are nurtured and encouraged within the business community.
Vince Cable has acknowledged this challenge, he has publicly stated that his campaign will emphasise that improving diversity is good for business, not just “for political correctness” and it is reported that his campaign intends to propose mentoring schemes to help ethnic minority candidates rise through the ranks. His messaging will be vital to HR professionals who will need to utilise his campaign to ensure that ethnic minority equality gets on to board agendas. To really achieve equality in boardrooms UK businesses will need to take their lead from how the NFL ensured the success of the Rooney rule; by not just relying on targets and quotas but also putting measures such as career development advisory panel in place that help them identify and guide worthy ethnic minority candidates.
For now one thing is clear; further thought, and possibly legislation, will be required to ensure that racism is kicked out of the boardroom once and for all.
Positive discrimination is where an individual is treated more favourably than another because they have a protected characteristic such as race.
Positive action is where an employer takes certain steps to assist protected groups which are disadvantaged or under-represented in a particular job. The positive action provisions of the Equality Act 2010 only offer a limited exception to the prohibition on discrimination in employment.
The Rooney rule is the obligation introduced in 2003 in the US for NFL teams to interview at least one ethnic minority head coach or general manager candidate.