The sort of person who gets to lead a FTSE 100 company has been under the microscope for more than a decade. Over this period, several government reviews have examined the shortfall in female or non-white directors in blue-chip C-suites. Although progress has been made – companies on the index recently hit the overall target of 40% female directors and at least one ethnic minority board member – there’s still a long way to go.
To bridge these gaps, a “much more concerted effort” is required from boards of large listed companies. That’s the view of Hephzi Pemberton, founder and CEO of Equality Group, a diversity and inclusion consultancy.
Noting that there’s never been a woman from an ethnic minority at the helm of a FTSE 100 firm, she says: “This makes me think that boards simply aren’t looking at succession planning properly. What an amazing easy win it would be to have the first woman of colour as a CEO in the FTSE 100. Why wouldn’t you want that accolade for your company?”
There are also few leaders who are known to be LGBT+. That seems incredible, given that one of the world’s most high-profile corporate leaders, Apple’s Tim Cook, came out as gay nearly a decade ago. Bosses with known disabilities are similarly under-represented – a situation that could improve since Elon Musk revealed in 2021 that he has Asperger’s syndrome.
Dr Fatima Tresh is a senior diversity, equity and inclusivity manager at EY and a member of the Parker review committee, which reports on the ethnic diversity of UK boards. She believes that there may be more LGBT+ and disabled bosses than we know. Indeed, it was only in 2007 that Lord Browne of Madingley quit as CEO of BP after being outed by the Mail on Sunday.
“Definitions at the moment feel more complex,” Tresh says. “Companies are much less comfortable talking about disability and sexuality as identities or categories. But, as we get more comfortable with the conversation, I expect we’ll be tracking and benchmarking against them too.”
Another potential category to examine, social class, is even more fraught – and subject to frequent public debate.
Diversifying the CEO pipeline
Boards often blame the limited supply of diverse candidates ready to step into senior roles. This excuse is BS, argues Pemberton, who blames generations of privileged white men for their failure to encourage women and people from ethnic minorities to succeed them as business leaders.
Underlying this problem is the tendency among leaders to identify potential in people whom they see as similar to themselves, says Tresh, who adds: “If they’re successful, they think people like them will also be successful.”
While some studies have made the business case for diversity, arguing that it boosts corporate performance, Pemberton believes that the moral case is clear enough to warrant action. “Most of us want to live in an egalitarian society that has less bias and fewer hurdles for people to get to the very top of companies,” she says.
Tresh agrees: “It’s the right thing to do. We are a diverse society, so we should have representation in the most influential positions in business.”
There has been some progress of late: a fifth of the CEOs appointed by blue-chip plcs in the previous financial year were from non-white backgrounds, including Wael Sawan at Shell and Anil Wadhwani at Prudential. The FTSE 100 is set to have its highest-ever number of female CEOs – 10 – when Debra Crew takes the helm at Diageo in July.
That could represent the start of a virtuous cycle, according to Tresh. “The more we diversify leadership, the more we’ll diversify that pipeline,” she says. “That’s because candidates will have more role models and people to build relationships with.”
Next in the series, read about the career paths of FTSE 100 CEOs. Is there a formula for success?