Bosses 'silent' over race in boardrooms

Board rooms don't want to talk about race

There is a deafening silence over race in Britain's boardrooms.

So say the professional bodies that represent UK management in a report on ethnic diversity .

Black, Asian and minority ethnic groups (BAME), it says, are hugely under-represented in key management roles.

Only 6% of management jobs in the UK are held by minorities - yet they make up 12.5% of the working population. And businesses doesn't want to talk about it, the report says.

However, business is quite happy to talk about gender equality.

According to the report, "Delivering Diversity", produced by the Chartered Management Institute (CMI) and the British Academy of Management (BAM), 75% of the FTSE 100 companies surveyed now set progression targets for gender and 71% publish related data.

Why, asks the report, can they not do the same about race?

To be fair it's not all businesses. The report says that 54% of FTSE 100 leaders are actively championing greater diversity in their boardrooms.

But that leaves 46% who aren't, and only 21% who think it's worth publishing diversity targets and information.

Pavita Cooper: some manager are deeply nervous talking about race

Delivering diversity

Pavita Cooper chaired the Delivering Diversity Research Advisory Board.

She told the BBC's Today programme: "Managers themselves said to us they sometimes feel deeply nervous about talking about the issue of race. They are not quite sure what language to use, they're nervous about starting a conversation without offending someone."

Petra Wilton, director of strategy for the CMI said: "Too many leaders have been silent on race and ethnicity and it's time for change. The progress we've started to see on gender diversity shows how business can build momentum on the issue."

One BAME manager, cited in the report, described the appointment procedures in the upper echelons of corporate Britain in scathing terms: "White middle-class men from elite schools and universities, who tend to recruit people like them in their company."

Raph Mokades is the founder and managing director of Rare Recruitment agency, which specialises in placing ethnic minority graduates.

He thinks the FTSE 100 index doesn't tell the whole story. He said: "Our client base is somewhat uneven. You will find the law firms in particular making real efforts to recruit from ethnic minorities, the banks too and the public sector. But I don't see much of that happening in, say, the construction sector."

He divides the problems in two. On one hand there's the institutional obstacles where a company recruits in the manner of a gentleman's club, where white men employ other white men.

Then there is the other problem where the candidates themselves fall down because, as he says, companies do not "assess ability, but assess familiarity with a way of thinking."

Raph Mokades - placing ethnic minority graduates

Intellectual dexterity

"Let me give you an example," he says. "I had a candidate come back rejected from after an interview and got the feedback: Qualifications - tick. Personality - tick. Brain power - tick. Intellectual dexterity - a problem.

"This is the ability to sit around a table, take a position, argue it, change that position, you know, talk about whether anyone should spend £10,000 on a handbag, that sort of thing.

"It's what middle-class kids are brought up doing, sitting around a dinner table with their parents. But she wasn't middle-class, she hadn't even had a dinner table. And this sort of dexterity is an important quality in many, many professions."

There are other problems for ethnic minority candidates. Mr Mokades cites research which shows Chinese women are seen as being too passive and lacking in assertiveness, while young black men can avoid eye contact and adopt a monotone when talking to men in authority.

These things can be taught, and Rare provides courses and one-to-one coaching to train up its graduates.

Pavita Cooper said: "I think we are seeing progress at the entry level. Some organisations have up 20% of their graduates from a BAME background ... but you don't see those numbers translating through to the top of the organisation."

The bottom line

For the companies that ignore ethnic minorities there may be a financial penalty.

In 2012 McKinsey consultants published research into 180 publicly traded companies in France, Germany, the United Kingdom, and the United States.

It found the most diverse companies (those it described in the "top quartile" of the sample) had a return on capital that was 53% higher than those in the bottom quartile. Profits (EBITDA) in the top quartile were 14% higher than those of the least diverse companies.

McKinsey admits the link wasn't necessarily causal: having a diverse board of directors wasn't an automatic route to riches.

It said: "While we can't quantify the exact relationship between diversity and performance in such cases, we offer them as part of a growing body of best practices. These successful companies are simultaneously pursuing top-team diversity, ambitious global strategies, and strong financial performance."