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Pale and male no more: Why the new Department of Business bodes well for boardroom diversity

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Astus CEO Frances Dickens has high hopes for Business Secretary Sajid Javid

As champagne corks pop throughout the business community, Cameron has unveiled his post-election cabinet which combines established faces with an injection of fresh talent. For a leader often accused of surrounding himself with old school chums, Cameron seems to have been at pains to create a cabinet that is both inclusive and diverse.

The new faces at BIS – the Department of Business, Innovation and Skills – are a case in point and also a great example for the business world to follow. A former banker and culture secretary in the last government, Sajid Javid’s appointment means that the business community now has a business secretary who is likely to be friendly to business. 

Meanwhile moving former TV presenter and barrister Anna Soubry from a defence role to minister for small businesses means that the UK’s SMEs have a tough-talking representative working on their behalf. Crucially both Javid and Soubry have impressive credentials for their new roles. However their appointments also have the advantage of sending exactly the right signals to any remaining corporate dinosaurs, that greater ethnic and gender diversity at senior levels within organisations is now a need-to-have not just a nice-to-have.  

Ethnic diversity is a huge issue for UK boardrooms with figures suggesting that over 95% of FTSE100 board directors are white. Figures from the Office of National statistics show that 14% of the population is non-white so clearly this is far from representative.

What’s more, from a business point of view, predominantly white boards make no sense, as research shows that companies with more diverse workforces perform better financially.

It will be interesting to see how Javid with his corporate background addresses the problem and how much priority he gives it. Will he continue Vince Cable’s Lenny Henry-fronted campaign to encourage FTSE 100 companies to appoint at least one non-white director on the board by 2020? Or will he opt for a review into the issue of ethnic minority representation on boards, similar to the one carried out by Lord Davies into women on boards? One thing is clear: as a free market thinker, Javid is more likely to opt for business-led change than mandatory quotas, which businesses will be relieved about.

As the female chief executive of a successful small business, boardroom gender diversity is an issue I feel strongly about. Anna Soubry’s appointment on its own doesn’t necessarily advance the cause of gender diversity, although I’m pleased she will attend cabinet. (As a feisty female, myself, I’m also glad that Soubry has a reputation for being outspoken – let’s hope she’s outspoken on behalf of the UK’s small to medium-sized businesses).

Soubry’s appointment, along with a number of other cabinet positions going to women, mean that Cameron’s cabinet now comprises 30% women. While not as good as 50%, this is a promising start. It also reflects the fact that, following the election, women account for around 29% of MPs.

By appointing a greater proportion of women to cabinet than the 25% target set by Lord Davies for female representation on FTSE 100 boards, the government is not only setting a positive example to the business community, it looks to be aligning itself with the ambitions of the high profile 30% club which is campaigning for 30% of women on boards by the end of this year

Signalling good intentions are all very well – however those of us who champion the cause of greater boardroom diversity will be looking to the new team to take clear action in the form of ambitious, measurable voluntary objectives for increasing the number of women and ethnic minorities both on boards and at senior levels within organisations.

Frances Dickens is CEO of Astus Group

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