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Independent review sets out recommendations to improve diversity within public and private organisations

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03 Mar 2017

An independent government-backed review by Baroness McGregor-Smith has been published on issues faced by businesses in developing Black and Minority Ethnic (BME) talent in the workplace. She has set out a “roadmap to success” which outlines her key recommendations.

The full list of recommendations runs to 26 items, the last of which is a call for government support and action if opportunities have not improved for ethnic minorities in twelve months.  Baroness McGregor-Smith values the full utilisation of BME talent as a £24 billion annual benefit to the UK economy (1.3% of GDP).

Baroness McGregor-Smith’s recommendations include: 

  • Publish five-year aspirational targets and report against these annually – for listed companies and all businesses and public bodies with more than 50 employees.
  • Publish a breakdown of employees by race and pay band – for listed companies and all businesses and public bodies with more than 50 employees.
  • For all employers, take positive action to improve reporting rates amongst the workforce, explaining why supplying data will improve diversity and the business as a whole – for those impacted by the first two recommendations, this would be expected to improve the quality of data published.
  • Introducing a board-level sponsor for all diversity issues, including race, to be held to account for the overall delivery of aspirational targets. In order to ensure this happens, Chairs, CEOs and CFOs should reference what steps they are taking to improve diversity in their statements in the annual report.
  • Including a diversity objective in all leaders’ annual appraisals to ensure they take positive action seriously.
  • Using contracts and supply chains to promote diversity and seek bidders who show a real commitment to diversity and inclusion. 

There are also recommendations around mentoring, workshops or training on unconscious bias, recruitment and interview, reward and recognition and transparency around career pathways, achieving success and diversity policies. 

The government has responded to the report.  In the government’s response, it supports a business-led, voluntary approach to transparent disclosure and does not intend to legislate to ensure that workforce data is published in the first instance. It states: “The case you have made in your report is compelling and [we] expect businesses will want to comply… but will monitor progress and stand ready to act if sufficient progress is not delivered.” 

The Government has also announced (link to BEIS website) that a Business Diversity and Inclusion Group will be set up and chaired by Business Minister Margot James. It will bring together business leaders and organisations to coordinate action to remove barriers in the workplace and monitor employers’ progress. 

The press release, full report and government response are available on the BEIS website.

*Update 31 March 2017 - Business Minister Margot James has written to the chief executives of all FTSE 350 companies urging them to improve diversity and inclusion in the workplace and take up the recommendations in the McGregor-Smith review.  Following the publication of the McGregor-Smith Review, a Business Diversity and Inclusion Group was set up and the first meeting, chaired by Margot James, will be held in the coming months.*

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