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U.K. Investment Firms to Name and Shame Diversity Laggards

Benjamin Robertson
·1 min read

(Bloomberg) -- A U.K. investment-industry group whose members manage 8.5 trillion pounds ($11 trillion) of assets warned it will call out companies that don’t reveal the ethnic diversity of their boards.

Nearly three-quarters of the U.K.’s largest companies failed to report the ethnic make-up of their boards at annual shareholder meetings this year, according to The Investment Association. That’s despite a target for firms in the FTSE 100 stock index to have at least one director from an ethnic minority by next year.

Companies “need to take urgent action and report on ethnic diversity on their boards,” Chris Cummings, chief executive officer of the association, said in the statement on Friday. “Those who fail to do so will find themselves under investors’ spotlight.”

Public companies are coming under increased pressure from investors and governments to hire and promote more broadly when it comes to diversity. Movements including Black Lives Matter have highlighted how people from ethnic backgrounds can be disadvantaged because of bias in how firms recruit.

Diversity of age and gender among company board members contributes to better informed board decision-making and leadership, according to Bloomberg Intelligence analysis.

The 250-member association calls attention to companies that don’t meet investor expectations on diversity. This year, the group issued its highest-level warning to 29 companies in the FTSE 350 index for a lack of board diversity.

Read more: L&G to Vote Against Company Boards That Lack Racial Diversity

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