Chief executive officers of FTSE 350 companies are being urged to act on improving diversity at the workplace by nominating a board member to deliver on the target and publish a breakdown of their workforce by race and pay.
In a letter to CEOs, business minister Margot James has also asked the CEOs to set aspirational targets to help those from a black and ethnic minority background to progress in the workplace.
She said: “It makes no business sense for people to be left behind because of their ethnic background and I am asking FTSE 350 companies to play their part in driving the agenda for greater diversity in the workplace.”
Last month Baroness Ruby McGregor-Smith published her review into black and ethnic minority progression in the workplace which found that Britain’s economy would receive a £24 billion boost if Asian and black workers were able to progress in their careers at the same rate as their white counterparts.
BAME workers are less likely to apply for and be given promotions and are more likely to be disciplined or judged harshly, her report found.
Encouraging companies to take forward McGregor-Smith’s recommendations, the business minister also sought “genuine and lasting change” from within the business community.
Baroness McGregor Smith said: “I’m delighted to see the government playing its part in calling on the UK’s largest businesses to improve diversity and inclusion in the workplace.
“FTSE 350 companies must help to bring about change by committing to greater transparency and accountability on this vitally important issue as set out in the recommendations in my review.”
Margot James is set to chair the first meeting of the Business Diversity and Inclusion Group which aims to help business organisations coordinate action to remove barriers in the workplace.
Among those in the group are Baroness McGregor-Smith; Sir Philip Hampton and Dame Helen Alexander, who are leading a review aimed at increasing female leadership in FTSE companies and Sir John Parker, who has concluded a consultation on recommendations to increase BME representation in the boardroom.
The CBI, IoD, Business in the Community, Financial Reporting Council and Equality and Human Rights Commission will also take part.