A diverse boardroom that reflects its customers and wider society is likely to perform better and make better decisions. The Government are very supportive of the private-led diversity initiative chaired by Sir John Parker, who is currently considering how to increase ethnic diversity in FTSE 100 companies, and we expect the group to report on its findings next month.
I thank the Minister for that answer. I am chair of the all-party group on communities engagement, and fewer than 4% of directors in the 150 largest FTSE companies have ethnic minority backgrounds. Will the Government support a target of increasing the percentage of board members or directors with black and minority ethnic backgrounds to 10% by 2021?
My hon. Friend rightly points out this unsettling statistic, but, as with the fantastic work to get more women on boards, we support the principles of increasing the ethnic diversity of the boards of the FTSE largest companies through a business-led voluntary approach because we believe there is a strong business case for better board diversity. We need to tackle the root cause, which is why we have established the Baroness Ruby McGregor-Smith review looking at the obstacles faced by businesses in developing BME talent across the board, from recruitment right through to executive level.
It is a little disappointing that the Government have not put as much resource into developing issues around the Parker review as women on boards, and there has been a significant drop in diversity on boards since the Government established the review, which will report in November. Many organisations, including the Executive Leadership Council, have board-ready visible minorities ready to hit the road running. Will the Minister work with me to reverse the trend?
We are very happy to work with anybody who wants to see greater board diversity and, indeed, greater diversity in business all through the pipeline. The Government are clear that we want absolutely everybody to reach their full potential in life, regardless of their background, gender or race. Valuing diversity in the workplace is not just the right thing to do; our economy cannot afford to waste the talent of a single individual.