UK and US lag behind global progress on executive diversity
Less than one-third of UK firms have any ethnic diversity on their executive team, according to a new report. The damning study also found that the US and UK are lagging behind the rest of the world when it comes to improving on this front.
Despite progress on gender balance in senior levels of global businesses proceeding at a snail’s pace, corporate entities remain hostile to regulation or diversity quotas. At present just 15% of CEO roles are held by women, according to research from Grant Thornton in 2019 (ironically just months after the firm’s UK wing had ousted its first female CEO).
Now, a report from McKinsey & Company has revealed that companies in the UK and US are performing just as poorly when it comes to improving ethnic diversity in their senior management teams. According to the study, which draws on data from over 1,000 companies in 15 countries, while only 20% of firms either side of the Atlantic had a female member of their executive team, just 13% had multi-ethnic executive teams.
On a global scale, this means that while the UK and US have outpaced other nations when it comes to gender representation (an average of 15% of companies worldwide have female executives), the two countries are lagging behind in terms of ethnic diversity. Since 2017, UK and US executive teams have seen a 1% improvement compared to the global average, which has been boosted by 2% in the same time.
Further revealing the slow progress being made to diversify leadership positions, meanwhile, ethnic diversity on UK and US boards has seen a percentage point rise of just 0.8% in the same period from 13% in 2014 to 17% in 2019. This, despite McKinsey’s research also adding to the snow-drift of reports which attempt to demonstrate to corporations that diversity is a vital component of financial growth.
The study found that companies in the top quartile for ethnic or cultural diversity in their executive teams are 36% more likely to experience above-average profitability. Meanwhile, companies with the smallest proportion of ethnic and gender diverse staff are 27% more likely to underperform on profitability.
McKinsey’s UK and Ireland managing partner Dame Vivian Hunt said, “Yet again, our research has shown that aside from the moral imperative for increasing inclusion and diversity, many companies are missing out on the opportunity to critically boost to their bottom line. We must remain vigilant, as our research shows, progress is too slow. While there has been great enthusiasm from many companies on improving inclusion and diversity, these efforts are not cutting through to employees on the ground or are the wrong set of interventions.”
