Investment managers are to increase pressure on investee companies to improve ethnic diversity on their boards.
Ahead of this year’s AGM season, the Investment Association (IA) said FTSE 350 firms that do not disclose board ethnic diversity or a credible action plan to improve it will be singled out and issued an ‘amber-top’.
Andrew Ninian, director for stewardship and corporate governance at the UK trade body, said the UK’s boardrooms need to reflect the diversity of modern-day Britain.
“With three-quarters of FTSE 100 companies failing to report the ethnic make-up of their boards in last year’s AGM season, investors are now calling on companies to take decisive action to meet the Parker Review targets,” he said.
The Parker Review states that firms should have at lease one director from an ethnic minority background by 2021.
“Those who fail to do so this year will find themselves increasingly under investors’ spotlight,” Ninian added.
Through the IA’s Institutional Voting Information Service, investors are also to seek greater progress on gender diversity as well as issues related to climate change.
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