KPMG warns of lack of socio-economic diversity on UK boards

Socio-economic background diversity on UK boards is “lacking”, and too few consider it as part of board recruitment and succession planning, according to new research from KPMG.

The findings are based on a survey of 64 FTSE 350 board members by KPMG UK’s board leadership centre, which was undertaken to “build an accurate picture of socio-economic representation on UK boards, as well as the challenges to driving greater socio-economic representation at the most senior levels”.

It revealed that:

Over 70% of respondents come from high socio-economic (professional) backgrounds, while only 15% came from low socio-economic backgrounds – suggesting a lack of socio-economic diversity in boardrooms

28% of respondents attended a private school, suggesting an over-representation of privately educated board members when private schools account for just 7% of the UK’s pupil population today

Respondents also highlighted the importance of networks and mentors in reaching the highest levels of business, with 67% stating they benefited from access to both

KPMG’s research also highlighted that only a small number of FTSE businesses are tracking the socio-economic background of board members (84% said their boards are not measuring it), while over two-thirds (69%) said their nomination committees were not factoring it into succession planning, suggesting a lack of prioritisation, compared with other diversity metrics.

Some 92% of respondents were not asked about their own socio-economic background in their recruitment process.

Bina Mehta, chair of KPMG UK, said: “Over the past decade there has quite rightly been a focus on ethnicity and gender representation in business, and progress has been made in recruiting from a broader base.

“However, socio-economic diversity has not been a focus, particularly in the make-up of boards, with few businesses reporting on their work to improve social class diversity or factoring it into board recruitment or succession planning.”

She added: “Research continues to show that where you come from and what your parents do for a living has an impact on the opportunities that are available to you in life, from work experience and career aspirations, through to hobbies and interests. A focus on social mobility is vital to create a fairer, more equitable society.”