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Corporate Governance – a review on race in the workplace

Print publication

04/04/2017

On 28 March 2017, the McGregor-Smith review on race in the workplace and Government’s response were published. The review makes a number of recommendations to improve diversity within companies and organisations. These include:

  • all listed companies and businesses with more than 50 employees should publish a breakdown of employees by race, ideally by pay band, on their website and in their annual report
  • Government should legislate to ensure that workforce data broken down by race and pay band is published
  • businesses with more than 50 employees should identify a person at board-level to be responsible for all diversity issues, including race, who should be held to account for the overall delivery of policy. To ensure this happens, Chairs, CEOs and CFOs should state what steps they are taking to improve diversity in their statement within the annual report.

In its response, Government states that it believes that a non-legislative solution is the way forward but that it will monitor progress and be ready to legislate if sufficient progress towards race diversity is not made. It notes that companies are already required to use the strategic report to document information about their employees and social and community issues and that businesses can choose to report information such as diversity of their employees as part of this.

The Business Minister has written to the CEOs of all the FTSE 350 companies calling on them to take up the following key recommendations:

  • to publish a breakdown of their workforce by race and pay
  • to set ‘aspirational targets’ in relation to race diversity
  • to nominate a board member to deliver on those targets.

WM comment

It is interesting to note that Government believes that legislation is not necessary to implement the findings of the review. We shall have to wait and see whether that continues to be the view or whether legislation is proposed in the future.

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