In 2017 Sir John Parker published a government-backed review with a simple goal: every FTSE 100 board should include at least one director from an ethnic minority background by December 2021. By the deadline, 96 of the 100 firms met the target, up from 47 in 2016. The improvement was real, but it also exposed a deeper problem. The target counted companies, not seats. Across the FTSE 100, ethnic minority individuals still held only a small fraction of all board positions, and their presence in executive roles and the pipeline below the board remained minimal.
Parker followed with a second target: all FTSE 250 companies should have at least one ethnic minority director by December 2024. As of May 2024, the outcome of that deadline was not yet fully established. What is clear is that the structure of the targets, measuring whether a company has at least one such director rather than the share of seats, has drawn criticism for masking the overall level of representation.
At the same time, the UK government began to dismantle the very category that the Parker Review used. In March 2021, the Commission on Race and Ethnic Disparities, chaired by Dr. Tony Sewell, recommended that the government stop using the aggregated term 'BAME'. In March 2022, the Race Disparity Unit issued formal guidance for public bodies to refer to specific ethnic groups instead. The acronym that had framed a decade of corporate diversity policy was officially retired from government statistics and guidance.
The Parker Review Targets and Their Limits
The Parker Review began as an independent inquiry into the lack of ethnic diversity on UK corporate boards, commissioned by the government and led by Sir John Parker, a veteran businessman and former chairman of Anglo American. Its final report in 2017 set a voluntary target: each FTSE 100 board should have at least one director from an ethnic minority background by December 2021. The target was not a quota. Firms were asked to disclose their progress annually, and the review published a follow-up report in 2020 tracking movement.
The 'one by 2021' result
When the December 2021 deadline arrived, 96 FTSE 100 businesses had at least one ethnic minority director on their board. That was a marked increase from 47 firms in 2016, before the review began. But the metric was binary. A company with one ethnic minority director out of ten counted as a success, while a company with three out of twelve counted the same way. The overall percentage of ethnic minority directors across the FTSE 100, a figure the review itself tracked, remained far lower than the number of businesses meeting the target suggested.
The FTSE 250 target
For the FTSE 250, the Parker Review set a December 2024 deadline for every company to have at least one ethnic minority director. As of May 2024, it was too early to determine whether the target would be reached. The FTSE 250 represents a broader set of enterprises, many with smaller boards and fewer resources for board recruitment. Progress toward that deadline was not yet fully reported.
The 'Missing Middle' in the Executive Pipeline
Boardroom targets do not address the composition of the executive pipeline immediately below board level. This gap, often called the 'missing middle', refers to the underrepresentation of ethnic minority individuals in senior roles such as chief financial officer, chief operating officer, and divisional managing director, positions that traditionally feed into the board.
Firms that met the Parker target by appointing a single non-executive director from an ethnic minority background did not necessarily change the makeup of their executive committees. The Parker Review itself noted that progress on executive roles lagged behind board appointments. The problem is structural. Recruitment for non-executive directors can draw from a wider pool of candidates, including those with public-sector or academic backgrounds. Executive roles, by contrast, typically require long tenure in a specific industry, and small numbers at earlier career stages limit the pool.
The 'missing middle' matters because it determines whether boardroom inclusion is sustainable. A board that draws ethnic minority directors from outside the organisation rather than from its own executive ranks may revert to its previous composition if those directors leave. The pipeline problem also means that the experience and perspective of ethnic minority leaders remain underrepresented in the day-to-day management of businesses, not just in the boardroom.
The Business Case for Ethnic Diversity on Boards
The Parker Review and subsequent corporate initiatives have consistently cited a business case for increasing ethnic minority representation in leadership. The argument runs that more varied boards make better decisions because they bring a wider range of perspectives, challenge groupthink, and improve the board's understanding of a diverse customer base.
Some evidence supports the link between board composition and financial performance, though the relationship is contested. Studies published by consulting firms and academics have found that organisations with more diverse executive teams tend to report higher profitability, though correlation does not establish causation. The business case also includes consumer insight. In a country where roughly 14 percent of the population identifies with an ethnic minority group, boards that reflect that demographic are argued to be better equipped to design products and marketing that reach those consumers.
The business case is not universal. Critics argue that it places an instrumental value on inclusion, suggesting that ethnic minority directors are valuable only insofar as they improve returns, rather than because representation is a matter of fairness. Nonetheless, the business case has been the primary argument used by the Parker Review and by the Financial Reporting Council, which in 2018 incorporated board composition reporting requirements into the UK Corporate Governance Code. The code asks firms to report on ethnic makeup and their policy on inclusion, though it does not set numerical targets.
From 'BAME' to Specific Ethnic Group Reporting
In March 2021, the Commission on Race and Ethnic Disparities, chaired by Dr. Tony Sewell, published its report on racial inequality in the UK. One of its most consequential recommendations was that the government should stop using the aggregated term 'BAME', which stands for Black, Asian, and Minority Ethnic. The commission argued that the acronym lumped together groups with very different experiences of disadvantage, discrimination, and economic outcomes, making it difficult to target policy effectively.
The UK government acted on that recommendation quickly. In March 2022, the Race Disparity Unit, a body within the Cabinet Office, published guidance for all public-sector organisations and official statistics. The guidance stated that the term 'BAME' should no longer be used. Instead, data collectors and policymakers should refer to specific ethnic groups such as Black African, Black Caribbean, Indian, Pakistani, Bangladeshi, Chinese, and others. The guidance applied to all government publications, surveys, and reporting.
The shift away from 'BAME' had implications for corporate reporting as well. Many businesses had used 'BAME' as a single category in their disclosures. After the government guidance, the Financial Reporting Council and other bodies began to encourage more granular reporting. The Parker Review, which had used 'ethnic minority' as its category, did not itself adopt the specific-group approach, but the broader policy environment moved toward disaggregated data.
The Sewell Report and the Controversy Over Structural Racism
The Commission on Race and Ethnic Disparities, known as the Sewell Report, was itself controversial. Its core finding, that the UK was not a systemically racist society, was rejected by many campaign groups, academics, and opposition politicians. The report argued that factors such as family structure, geography, and cultural attitudes explained disparities in outcomes more than institutional racism did.
That framing had direct consequences for how the government approached corporate inclusion. The Sewell Report recommended not only dropping the term 'BAME' but also shifting policy away from equality-of-outcome targets toward equality-of-opportunity measures. It argued that setting targets for board representation risked tokenism and that the focus should instead be on improving educational and career progression for ethnic minority individuals from an early stage.
The government accepted much of the report's analysis. The Race Disparity Unit's guidance on terminology was one outcome. Another was a move away from the kind of voluntary numerical targets that the Parker Review had championed. No new government-backed review replaced the Parker Review Committee with similar targets. Instead, corporate inclusion became a matter for individual organisations and for the Financial Reporting Council's governance code, which requires disclosure but does not mandate representation.
What the Targets Did and Did Not Change
The Parker Review moved the FTSE 100 from a starting point where fewer than half of firms had any ethnic minority board presence to a point where almost all did. That is a measurable achievement. But the target itself, one director per board, was a low bar. A company that appointed a single ethnic minority non-executive director in 2018 and did nothing else for three years still met the goal. The review's own data showed that ethnic minority representation as a share of all board seats remained low.
The FTSE 250 target, if met, would extend the same binary measure to a larger set of enterprises. The pipeline problem, however, would remain. The 'missing middle' of executive roles below the board level was not addressed by either target. The Parker Review did not set targets for executive committees, chief financial officer positions, or divisional heads, and the government did not require them.
As of May 2024, the policy landscape had shifted. The term 'BAME' was gone from official use. The government had not launched a new review with fresh targets. The Financial Reporting Council's governance code required firms to report their board composition and policy, but did not set a minimum. The Parker Review's targets, voluntary and binary, remained the most prominent numerical goals for ethnic minority representation in UK business leadership, and their limits were increasingly clear.
Key Facts: Parker Review and UK BAME Leadership
- Parker Review published: 2017, final report led by Sir John Parker
- FTSE 100 target: At least one ethnic minority director by December 2021
- FTSE 100 result (2021): 96 of 100 companies met the target, up from 47 in 2016
- FTSE 250 target: At least one ethnic minority director by December 2024
- Sewell Report published: March 2021, recommended dropping 'BAME'
- Government guidance on 'BAME': March 2022, Race Disparity Unit told public bodies to stop using the term
- Regulatory body: Financial Reporting Council, incorporated diversity reporting into UK Corporate Governance Code
Parker Review Targets and Progress
| Target group | Target | Deadline | Result as of May 2024 |
|---|---|---|---|
| FTSE 100 | At least one ethnic minority director per board | December 2021 | 96 of 100 companies met target |
| FTSE 250 | At least one ethnic minority director per board | December 2024 | Not yet fully established |
FAQ: BAME Leadership and UK Policy
Why did the UK government stop using the term 'BAME'?
The Commission on Race and Ethnic Disparities (Sewell Report) recommended in March 2021 that the government stop using the aggregated term, arguing it masked differences between ethnic groups. The Race Disparity Unit issued formal guidance in March 2022 requiring public bodies to refer to specific ethnic groups.
Did the Parker Review set targets for executive roles, not just boards?
No. The Parker Review targets applied only to non-executive and executive director positions on the board. It did not set targets for executive committee roles or other senior management positions below the board.
Is the FTSE 100 board diversity target legally binding?
No. The Parker Review targets were voluntary. The Financial Reporting Council's UK Corporate Governance Code requires companies to report on their board diversity policy and composition, but it does not mandate specific representation.
