Improving ethnic diversity on public company boards
Warren Partners is a signatory and passionate supporter of the WiR/RIA EDI Charter. We are committed to playing our part increasing diversity in the rail industry and across all our chosen sectors. As industry headhunters, we have a responsibility to drive positive change by delivering diverse shortlists and placing women, ethnically diverse candidates, and those from other under-represented groups in senior leadership roles. This is so important as truly diverse organisations build and nurture a culture that allows diversity to flourish; this is shaped by those at the top. However, we wanted to go beyond our ‘day job’ and following extensive discussions with boards across industries, we devised and launched the Board Fellowship Programme.
Female representation on FTSE 250 boards has seen marked improvement, primarily as a result of political and investor and shareholder pressure, the Davies Report, then the Hampton Alexander Review. However, ethnic diversity still lags behind, due to a great extent to the stipulation on many head hunter briefs that NED candidates must have listed business board and C-suite experience. This is a real barrier to progress given the lack of ethnic diversity on listed boards.
The Board Fellowship Programme is our attempt to widen the pool. It works as follows; the main market listed business takes on an ethnically diverse Fellow for 12 months. The Fellow gains listed business exposure/experience, is mentored by the Chair and experienced FTSE NEDS, and gains access to a valuable network. In return, the host board benefits from the active and passionate contribution of a diverse yet credible individual (we describe it as a ‘voice but not a vote’) and perhaps specific experience/insight of value (this could include hot topics such as ESG or digital/technology). At the end of the 12 months the Fellow could be taken on as a NED by the host business, but if not they compete the programme with the network and experience to open opportunities on other boards. The Fellow is not remunerated (just expenses covered) and there is no fee payable to Warren Partners (unless the Fellow is taken on as a NED at the end of or during the 1 year tenure).
"We have a responsibility to drive positive change by delivering diverse shortlists and placing women, ethnically diverse candidates, and those from other under-represented groups in senior leadership roles."
To support this initiative, we have actively grown a pool of high calibre, highly credible, board experienced candidates who come from backgrounds currently ‘untapped’ by those seeking FTSE 250 NEDs. This includes public or third sector, SMEs, and entrepreneurs.
We launched the programme earlier this year in collaboration with the CBI and KPMG. Already several boards have expressed an interest and we are delighted to have placed our first Fellow on the board of a FTSE 250 with further processes ongoing.
This is not, of course, the sole solution to a complex, multi-faceted issue. Progress must be made on multiple fronts, crucially to include a greater appreciation of inclusion. Again, this is about culture change and business leaders making it a priority to gain a deep understanding of the day-to-day experience of their diverse employees, then taking meaningful action.
This is a critical time of change for the rail industry and the WiR/RIA EDI Charter is about shifting the dial on diversity and inclusion as a central element of that change. The industry will reap huge benefits as a result.