Largest charities 'have less diverse boards than FTSE 100 firms', says report

An analysis of trustees by Inclusive Boards shows that 6.3% of the top 500 charities in Wales have BAME trustees, compared with 8% of FTSE 100 companies

Diverse boards: work to do
Diverse boards: work to do

The largest charities have a smaller proportion of people from ethnic minorities on their boards than FTSE 100 companies, new research shows.

An analysis of the board members of the 500 largest charities in England and Wales by annual income showed that 6.3 per cent were from black, Asian or minority ethnic backgrounds, compared with 8 per cent among FTSE 100 companies.

Researchers found that of the 500 charities surveyed, 287 had no identifiable BAME trustee, or 57.4 per cent, while 113, or 22.6 per cent, had boards that included between 1 and 10 per cent of members from ethnic minorities.

The findings have been published today in a report from Inclusive Boards, which supports third and public sector organisations in attracting more leaders at board and executive level from ethnic minority backgrounds.

The report says that in the most recent UK census, which was carried out in 2011, 14 per cent of people identified themselves as being from non-white backgrounds.

Inclusive Board’s research was conducted by examining a total of almost 6,000 trustees listed on each charity’s entry on the Charity Commission website and cross-referencing them with information on other websites such as LinkedIn to establish ethnicity.

Researchers found that eight of the top 500 charities had boards consisting solely of people from ethnic minorities, which were charities that had a predominantly international focus or primary charitable objectives aimed at supporting ethnic minority or religious groups, the report says.

It says that of the 121 trustees listed for the top 10 charities, 16 were from ethnic minorities.

The report says that organisations in the public and private sectors have embraced diversity but, by contrast, the voluntary sector has been slow to address the challenge.

"This is a particular concern when considering the fact that end users are more likely to come from marginalised and under-represented backgrounds," it says.

The report says the government should review policy and legislation on charity governance and should set a target of doubling the proportion of ethnic minority trustees to 12.6 per cent by 2020.

It recommends that the Charity Commission should play a proactive role in strengthening diversity within governance in the third sector using the private sector as a benchmark.

It also suggests that charities should develop diversity benchmarks to compare their performance with the private and public sectors.

A spokesman for the Charity Commission said the regulator fully supported efforts to enhance diversity in the voluntary sector.

"Greater diversity at board level can improve governance by adding new perspectives and aiding better decision-making," he said. "Charities will be more effective if their boards reflect the communities they serve and support."

He said that, where possible, charities should recruit widely to secure the skills they needed, including advertising publicly and encouraging applicants from outside their typical pool. He said charities should look at the regulator’s CC30 guidance on finding new trustees.

The figure of 8 per cent of board members of FTSE 100 companies comes from a review overseen by Sir John Parker, which was published earlier this month by the professional services firm EY.

Parker found that 53 of the FTSE 100 firms had no directors from ethnic minorities.

Research carried out by Third Sector in 2014 into diversity among the top 50 fundraising charities found that 12 per cent of chief executives, 6 per cent of senior management team members and 8 per cent of trustees were non-white.

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