The Bank of England, Deloitte and fashion designer Stella McCartney have called on British companies to voluntarily report their ethnicity pay gap in a bid to tackle inequality in the workplace.
The move comes almost a year since firms were required to report their gender pay gap and two months since the Government completed its consultation on ethnicity pay reporting.
A total of 15 companies have signed up to the framework, pledging to work towards reporting their ethnicity pay gap, and are encouraging others to follow suit.
Other signatories include health provider Bupa, banking giants Citi and Santander, accountancy firms EY and KPMG, television production company ITN, engineering firm Jomas Associates, insurance market Lloyd’s of London, and advertising firm WPP.
Research from INvolve, which is championing the cause, found that there are more FTSE 100 company chief executives called Steve than ethnic minority leaders put together, and that 51% of companies listed on London’s blue-chip index have no ethnic minority board members.
INvolve also revealed that white people earn on average between £67 and £209 more per week compared with peers from a different ethnic background.
So far only around 3% of large companies have voluntarily reported their ethnic pay gaps, including the Bank of England, Deloitte, EY, KPMG and ITN.
Transparency over pay has come into focus in recent years as at the start of 2019 new rules came into force that required Britain’s biggest companies to justify bosses’ salaries and reveal the pay gap with their average workers.
Last year new regulations required all UK companies and public sector organisations with 250 or more employees to publicly report the pay disparity between men and women.
In January, the Government finished consulting on a directive to require companies to report their ethnicity pay gap, although the nature of what data will be reported, and how, is yet to revealed.
INvolve boss and co-founder Suki Sandhu said: “Addressing hard issues like disparity and race is never easy, but the moral and business case for taking action must win out. For many businesses the idea of increasing corporate reporting is not a welcome one.
“But, as shown by mandatory gender pay gap reporting, it is vital to encourage discussion and help businesses to deliver impactful change.”
Bank of England chief operating officer Joanna Place said: “Reporting on the gender pay gap has helped us better understand some of the challenges we face in progressing our inclusion and diversity agenda.
“Extending this scrutiny to the ethnicity pay gap is not only the right thing to do, it also makes good business sense for companies wanting to recruit and retain talent.”