What are the UK’s top retailers doing to improve racial & ethnic diversity in the boardroom?

Earlier this month, Retail Gazette looked into the retailers going beyond solidarity for Black Lives Matter. In this feature, we’re focusing on the issue of disparity many retailers are yet to tackle: that of diversity in the boardroom.

2128
What are UK’s top retailers doing about racial and ethnic disparity in the boardroom
Retail Gazette asked retailers in the FTSE 350 to tell us about their racial and ethnic diversity policies.

In the wake of the latest and ongoing surge of Black Lives Matter protests around the world, retailers of every size released statements of solidarity for the movement.

However, as the intensity of those few weeks pass, some critics are suggesting corporations have done little to turn this “moment” into a “movement”. In the UK, improving the representation at board level for Black, Asian and Minority Ethnic (BAME) people has been an incredibly slow process.

Last week, Marks & Spencer chief executive Steve Rowe pledged to take “urgent action” to address racism and diversity in the wake of Black Lives Matter (BLM). In a letter to staff, Rowe said that the actions taken by the retailer so far were not good enough and it would consider a “much overdue review of our approach to diversity and inclusion”. 

After the killing of George Floyd in the US sparked a new wave of BLM demonstrations, Rowe told employees that he hoped the incident would be “a catalyst for the world to face into the challenge of systemic racism and take meaningful action”.

Also last week, John Lewis Partnership was criticised for its lack of diversity in its top ranks, with just six of its 158 senior UK managers being non-white. Chairwoman Sharon White said the retailer was having “an open and honest debate” with its staff to improve the profile of the business.

While these examinations are necessary, there’s been plenty of research conducted in the years before 2020 that clearly points to the changes needed in corporate boardrooms. 

In a report released late last year, Green Park found that the number of BAME directors and non-executive directors on FTSE 100 retail boards increased by five per cent, up from 3.1 per cent in 2018 – but an increase of just 4.3 per cent since 2014. 

BAME representation in the leadership pipeline for FTSE 100 retailers also edged up just 0.4 per cent year on year to 7.8 per cent, which Green Park said raised “significant concerns about the prospects for any future improvement at board and executive committee level”. By all accounts, there is still a long way to go for retailers to achieve any semblance of representation on their boards.

In 2017 the Parker Review recommended that all FTSE 100 boards have at least one director from an ethnic minority background by 2021. With that deadline just six months away, Retail Gazette contacted each of the retailers in the FTSE 100, and the retailers in the FTSE 250, to find out if they had met that target, and what policies and strategies that have in place (if any) to continue improving representation in their board rooms.

“This process cannot merely be a box-ticking exercise”

Below, we’ve listed the responses from each of the retailers from which we’ve heard back. 

Aside from statements and corporate policies, we were eager to hear from people working to diversify the retail industry’s teams, and better understand why tangible progress and action has been so slow up to now.

The Parker Review’s “one by 2021” recommendation has meant consumers can begin to hold retailers accountable for a lack of diversity, but by aiming to appoint just one person identifying as from a BAME background to a board, this strategy places undue pressure on one candidate to fulfil a diversity quota.

“While it’s great that targets have been set, and in some cases achieved, to ensure better representation of BAME people, both in the boardroom and among staff, this process cannot merely be a box-ticking exercise,” DiversityQ editor Cheryl Cole to Retail Gazette.

“Organisations focused on meaningful change, which includes a culture change and creating an environment where everyone is comfortable and equipped to talk about race equity and inequities, will fare better in the long-term.”

DiversityQ, which advocates for developing diversity and inclusion in the workforce, believes now is the time for businesses to be implementing systems, policies and procedure changes, as well as race equality assessments to evaluate their progress, and that change should be led from the top.

“How to get started? Start with a shared vocabulary around race equity,” Cole added.

“Identify race equity champions at the board and senior executive level. Name race equity work as a strategic goal. And finally, collect, disaggregate, and report relevant data to get a clear picture of inequities and outcomes gaps both internally and externally.”

“There is no chance of the Parker Review targets being hit”

Recruitment and consultancy firm Green Park, whose Leadership 10,000 report revealed the slow pace of change at the top for retailers, believe there are myriad limitations of a “one by 2021” target and that it won’t be achieved within the next six months – or even six years.

“There is no chance of the Parker Review targets being hit. We’ve consulted at length for the review, and we reckon it’s going to be closer to 2051 than 2021,” Green Park founder and chief executive Raj Tulsiani told Retail Gazette.

“There’s loads of underlying reasons for that. The main one is an unwillingness to tackle bias within selection processes, and the extremely long standing and comfortable group-think that exists between retail leaders and a small band of headhunters, who do the majority of the external searches for those leadership positions. Both at board level, but critically also into the succession planning for those roles.

“When you combine that, with a lack of visible disability and ethnic minority representation in the pipeline within organisations, you suddenly get into a position where there are some very high-profile LGBT leaders, there are some very high-profile female leaders, but it’s always the exception rather than the rule.

“And that is a failing of retail HR and leadership. Because they simply haven’t given themselves a chance to hire from the widest capable pool.

Tulsani continued: “When you look at the non-listed retail market, of course it is significantly more diverse in its ownership and international outlook, but there is something about British corporate culture, particularly in retail, where they are very resistant to the kind of change and innovation that additional diversity will bring.

“Instead of seeing it as part of their strategy to become increasingly relevant and fight for market share, what they see it as is a risk.

“And that risk is compounded by a small handful of highly influential headhunters, who are effectively saying ‘the talent is not out there’, and what they should be saying is ‘the talent that is out there will not be attracted by these mandates in their current shape and through the current routes to market’.” 

Asked about the limitations of targets such as the Parker Review’s “one by 2021”, Tulsiani said: “When retailers say ‘we’ve one and done’, that doesn’t surprise me at all.

“When you look at the non-listed retail market, of course it is significantly more diverse”

“They are more interested in the risk of being seen not to have ethnic minority representation, than they are in the value of being an inclusive board.”

“Retailers are still fishing from the same pool of people that provide that old fashioned, comfortable, corporate governance to retailers. But of course, the world has moved on.”

For consumers, the clearest way of showing support for a brand’s corporate governance and policies is to vote with their money. Tulsiani warned that retailers who are slow to improve the racial and ethnic diversities of their board members and wider senior teams (or those who are doing nothing at all), will pay the price in the long run.

“For a short period, people will be much more interested in trying to recruit ethnic minority talent,” he said.

“For a number of reasons – some of them positive and some of them tokenistic. I think retailers are playing a very dangerous game, by not partnering with independent organisations who can validate them and help them through this.

“If they had the answers, if they had the lived experience, if they had the techniques to become more inclusive, they would have done it years ago.”

What do the UK’s top retailers say on how they are improving racial and ethnic representation and diversity in their board rooms?

FTSE 100

Associated British Foods (parent company of Primark):

“Primark takes diversity and inclusion very seriously. We are proud to count over 180 nationalities among our workforce in the UK and last year we established a special committee to further develop a diverse, inclusive and respectful workplace for all our colleagues.”

Primark noted that it is ranked in the top 15 companies for diversity and inclusion by Retail Week.

No comment was provided by Primark or AB Foods on whether AB Foods will have achieved the “one by 2021” target set out in the Parker Review. 

Burberry:

Burberry told Retail Gazette that their board had met the Parker Review target with the appointment of Debra Lee in September 2019.

The retailer said its focus in the past year has been on increasing their understanding and diversifying the pipeline of talent, and that they will be providing more details in the coming months.

To date, training on inclusive leadership has been completed by 90 per cent of Burberry’s store managers and leaders globally. Unconscious bias training is being further expanded as mandatory for all employees.

Last year, Burberry created an Internal Diversity and Inclusion Council formed of employees from across the company. The council is tasked with acting as an internal sounding board for Burberry on matters relating to diversity and inclusion. They are consulted on an ad hoc basis and meet formally three times per year. 

The luxury retailer also pointed to Burberry Inspire, its in-school arts and culture programme working to open up the creative industries to people who may not otherwise have had access to or felt able to pursue a career in this arena. The programme is now active in schools across Yorkshire in the UK and in New York City. 

Kingfisher (parent company of B&Q and Screwfix):

“Kingfisher recognises that people from different backgrounds and experiences bring valuable contributions to our company,” Kingfisher said in a statement to Retail Gazette.

“One out of eight members of our board identifies as being from a Black, Asian or minority ethnic background, and three out of eight Board members are female.”

Morrisons:

Morrisons directed Retail Gazette to their diversity policy included in their annual report from 2019/20. Within that policy, the grocer states:

“[Morrisons] supports the Parker recommendations that the board should include at least one Black, Asian and minority ethnic director.

“Throughout the year, the committee assisted the development of a pipeline of high-calibre candidates by encouraging a broad range of senior individuals within the business to take on additional roles to gain relevant experience.”

Morrisons added that as of the 2019/20 financial year, the board included one BAME director.

More information on Morrison’s Diversity Policy can be found here.

Ocado:

“Diversity and inclusion has always been a priority for us at Ocado. We are committed to creating a diverse workforce and environment that supports all individuals irrespective of their race, gender, age, disability, sexual orientation or religion,” Ocado told Retail Gazette in a statement.

Ocado did not comment on whether it would reach the Parker Review target by the end of the year.

For background on Ocado’s diversity policies, the online grocer pointed to p62 of its Annual Report.

Tesco:

“At Tesco, we welcome colleagues and customers from all ethnicities and backgrounds,” a Tesco spokesperson told Retail Gazette.

“We have active colleague networks to support, promote and raise awareness of inclusion at Tesco.

“We offer mentoring and career sponsorship, and seek feedback from colleagues about their own experiences. But we know there is more we can do.

“In addition to signing the Race at Work charter, we have pledged to set targets for diverse candidate slates for every vacancy in our business.”

Tesco added that it recently signed an open letter published in The Sunday Times, with a pledge to set targets for diverse candidate slates for every vacancy in their companies.

Following the appointment of Melissa Bethell to its board in 2018, Tesco said complied with the requirement of the Parker Review.

In order to improve ethnic diversity, Tesco said it signed the Race at Work Charter and is making progress towards its five calls to action, which holds businesses to account for racial equality at work.

They have also been working with the BAME at Tesco network to hold focus groups with BAME colleagues to help understand their perceived blockers to getting on at Tesco, feedback which Tesco says will help shape both their near-term and long-term diversity and inclusion plans.

Sainsbury’s, Next and JD Sports did not respond to the Retail Gazette with a statement or policies to refer to at the time of print.

FTSE 250

AO World:

“At AO, we know we have more to do when it comes to diversity and that’s why we appointed a diversity and inclusion lead late last year who is working with our leadership team to develop our plan,” an AO World spokesperson told Retail Gazette.

“This includes ethnic and racial representation across the group.”

No comment was provided by AO World regarding whether it would achieve the “one by 2021” target set out in the Parker Review. 

Dixons Carphone:

“We believe our business is all the better because of our diversity in all its forms, and we’re continuously striving to ensure everyone at Dixons Carphone feels included, can be themselves, and be at their best. However, we know there is always more to be done and we are currently updating our Inclusion and Diversity strategy to continue to raise the bar on our efforts through 2020 and beyond,” Dixons Carphone head of culture, inclusion and engagement Sharon Murray told Retail Gazette.

“As part of this work we are talking to third party specialists and advisors to further develop our approach to inclusion. Alongside this, we will continue to listen to, work with and proactively engage and encourage dialogue with colleagues across a range of topics as we develop as a business. We will share our progress as we continue on our journey,” added Murray.

Dixons Carphone noted that it has met the Parker Review target, and said it had recently appointed Murray to lead its inclusion and diversity efforts.

The retailer said that Murray would leading the development of its updated comprehensive and holistic Inclusion and Diversity Strategy which has the sponsorship of its PLC board and executive committee.

M&S:

Marks & Spencer told Retail Gazette that the board’s objective of driving the benefits of a diverse board, senior management team and wider workforce is underpinned by their Board Diversity Policy which can be found on p58 of their Annual Report.

With regard to the recommendations of the Parker Review Committee, a spokesperson for M&S said its board has been committed to achieving ethnic diversity as well as gender diversity. 

M&S said that with the appointment of Sapna Sood in June, the “one by 2021” target has been met.

The retailer also provided a link to an extract from chief executive Steve Rowe’s letter to colleagues earlier this month.

Pets at Home:

“We are in the process of finalising our 2030 social purpose strategy which will include our commitment to equality, inclusion and diversity, and are due to publish this soon,” a spokesperson for Pets at Home told Retail Gazette.

“It is our ambition to be the most inclusive and diverse organisation that we can be – one where everyone, at every level, is celebrated and recognised for what they contribute, and which welcomes individuals from every background, regardless of race, religion, gender or sexual identity.”

Pets at Home added there was no one identifying as BAME currently on its board.

Travis Perkins (also parent company of Toolstation):

“We recognise the importance of improving diversity across Travis Perkins Group and in the construction sector,” said a spokesperson for Travis Perkins said.

“Currently, 12 per cent of our branch managers are of BAME backgrounds, but we know we still need to do better to ensure that our business and the board are more reflective of the communities we serve.

“This is an area of priority and something we at Travis Perkins are focused on achieving.”

No comment was provided by Travis Perkins regarding whether it would achieve the “one by 2021” target set out in the Parker Review. 

WHSmith, Watches of Switzerland, Games Workshop and Dunelm did not respond to the Retail Gazette with a statement or policies to refer to at the time of print.

Click here to sign up to Retail Gazette‘s free daily email newsletter

LEAVE A REPLY

Please enter your comment!
Please enter your name here