Hospitality sees ‘significant drop’ in ethnic minority representation at board level, report shows – The Caterer

Report on Diversity and Inclusion in the UK Hospitality, Travel, and Leisure Sector

Executive Summary

A report issued by WiHTL (Women in Hospitality, Travel and Leisure) and DiR (Diversity in Retail), with analysis from The MBS Group, indicates significant challenges to achieving Sustainable Development Goals (SDGs) within the UK’s hospitality, travel, and leisure (HTL) sectors. The findings reveal a critical decline in ethnic minority representation at senior leadership levels, directly impacting progress towards SDG 10 (Reduced Inequalities). While progress is noted in gender diversity, aligning with aspects of SDG 5 (Gender Equality), key leadership roles remain male-dominated. The report underscores the commercial imperative for inclusion, linking it to SDG 8 (Decent Work and Economic Growth), as inclusive companies demonstrate superior revenue growth.

Key Findings on Diversity and Inclusion

Challenges to SDG 10: Reduced Inequalities

• There has been a “significant drop” in ethnic minority representation at the board level.
• Nearly half of all hospitality boards are all-white, indicating a lack of diverse perspectives in corporate governance.
• Representation at the top three senior levels (Board, Executive Committee, and Direct Reports) has fallen to its lowest point since 2021.
• Only 5% of Executive Committee members in the HTL sector are from an ethnic minority background.
• Ethnic minority representation in the HTL workforce (11.1% and 15% at two levels below direct reports) remains below the 18% average for the UK working population, highlighting a systemic inequality.

Progress and Gaps in SDG 5: Gender Equality

• The HTL industries outperform the wider FTSE 350 in gender diversity across boards, executive committees, and direct reports.
• Gender diversity is approaching parity at levels two tiers below direct reports.
• A significant gap remains in achieving Target 5.5 of SDG 5, as women are underrepresented in the highest leadership positions of Chair, CEO, and CFO.

Commitment to SDG 8: Decent Work and Economic Growth

• A high level of corporate commitment is evident, with 91% of surveyed businesses listing Equity, Diversity, and Inclusion (EDI) as a top 10 priority.
• Many businesses have invested in training initiatives to support neurodiversity and social mobility, contributing to inclusive work environments.
• Over 50% of surveyed businesses could identify an LGBTQ+ leader, and 25% could identify a physically disabled leader.
• Research from AlixPartners confirms the economic benefits of inclusion, showing that companies championing these values delivered an average revenue growth of 5.1%, reinforcing the link between decent work and economic growth.

Industry Perspectives and Recommendations for Advancing SDGs

1. Strengthen Institutional Commitment: Industry leaders affirm that inclusion is vital for building stronger, more successful organizations. To align with SDG 16 (Peace, Justice and Strong Institutions), businesses must ensure that people from all backgrounds have a seat at the table to improve decision-making and results.
2. Leverage the Sector for Social Mobility: The hospitality sector is positioned as an “engine room” for social and economic progression, capable of advancing SDG 8. By intentionally targeting communities historically excluded from opportunity, the industry can provide skills, confidence, and careers for individuals who might otherwise be left behind.
3. Foster Psychologically Safe Environments: Continuous focus and action are required to maintain progress. Creating psychologically safe environments is identified as a critical component for making workplaces more inclusive for everyone at every level, which is a foundational element for achieving both SDG 8 and SDG 10.

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 5: Gender Equality

   • The article directly addresses gender equality by discussing gender diversity in the hospitality, travel, and leisure industries. It notes that while these industries outperform the FTSE 350 in gender diversity across boards and executive committees, “there is more work to be done in representing women at chair, CEO and CFO roles.” This highlights a focus on achieving gender balance in top leadership positions.

2. SDG 8: Decent Work and Economic Growth

   • The article connects inclusive employment practices to economic growth, stating that “companies where leaders fully championed inclusion delivered the highest average revenue growth at 5.1%.” It also emphasizes the role of the hospitality sector in providing decent work, describing it as an “engine room of the UK’s social and economic progression” that can “open doors for people who might otherwise be left behind” and give them the chance to “build skills, confidence and careers.” The mention of creating “psychologically safe” environments also relates to promoting secure working conditions.

3. SDG 10: Reduced Inequalities

   • This is the most prominent SDG in the article. The central issue is the “significant drop in ethnic minority representation at board level,” with data showing that “nearly half of hospitality boards remaining all-white” and representation at senior levels plummeting to just “5% of ExCo.” The article’s focus extends to other marginalized groups, mentioning initiatives for neurodiversity, social mobility, and the representation of LGBTQ+ and physically disabled leaders. The goal is to create “truly inclusive workplaces” where everyone has the opportunity to thrive, directly aligning with the aim of reducing inequalities.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Under SDG 5 (Gender Equality):

   • Target 5.5: “Ensure women’s full and effective participation and equal opportunities for leadership at all levels of decision-making in political, economic and public life.” The article’s call for “more work to be done in representing women at chair, CEO and CFO roles” is a direct reflection of this target, focusing on equal opportunities for leadership in the economic sphere.

2. Under SDG 8 (Decent Work and Economic Growth):

   • Target 8.5: “By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value.” The article supports this target by highlighting the industry’s ability to “open doors for people who might otherwise be left behind” and “intentionally target communities and neighbourhoods that have historically been excluded from opportunity,” which includes creating roles for people with disabilities.
   • Target 8.8: “Protect labour rights and promote safe and secure working environments for all workers…” The statement that “Creating psychological safety is critical” for making environments “more inclusive for everyone at every level” directly aligns with promoting secure and safe working environments.

3. Under SDG 10 (Reduced Inequalities):

   • Target 10.2: “By 2030, empower and promote the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status.” The article’s entire focus on the lack of ethnic minority representation and the need to include neurodiverse, LGBTQ+, and disabled individuals in leadership and the workforce is a direct embodiment of this target.
   • Target 10.3: “Ensure equal opportunity and reduce inequalities of outcome…” The report’s purpose is to highlight the inequality of outcome (low representation of minorities in senior roles) and implicitly calls for actions and policies to ensure equal opportunity, as stated by the goal of ensuring “everyone, regardless of their starting point, has the opportunity to contribute, grow and thrive.”

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. Indicators for SDG 5, Target 5.5:

   • The article implies the use of an indicator similar to the official Indicator 5.5.2 (Proportion of women in managerial positions). It provides specific data points for measurement, such as the proportion of women in “chair, CEO and CFO roles” and their representation on “boards, executive committees and direct reports.”

2. Indicators for SDG 8, Target 8.5 & 8.8:

   • Proportion of employees with disabilities: The article mentions that “25% [of businesses] could identify one physically disabled leader,” which can be used as a proxy indicator for the inclusion of persons with disabilities in the workforce.
   • Policies on workplace safety: The emphasis on “creating psychological safety” implies that the existence and effectiveness of such policies within organizations could be a qualitative indicator for Target 8.8.
   • Revenue growth in inclusive companies: The finding that inclusive companies “delivered the highest average revenue growth at 5.1%” can be used as an economic indicator demonstrating the commercial benefits of achieving decent work and inclusion.

3. Indicators for SDG 10, Target 10.2 & 10.3:

   • Proportion of ethnic minorities in senior leadership: The article provides very specific data that serve as direct indicators. These include:
     • The percentage of ethnic minority representation on boards.
     • The percentage of ethnic minority representation on executive committees (ExCo), which is stated as “just 5%.”
     • The percentage of all-white boards, noted as “nearly half of hospitality boards.”
   • Proportion of leaders from other minority groups: The article provides metrics that can be used as indicators for broader inclusion, such as the percentage of businesses that “could identify an LGBTQ+ leader” (more than half) and a “physically disabled leader” (25%).

4. SDGs, Targets and Indicators Table

Source: thecaterer.com