Too few black and Asian faces at the top

A review of the role of non-executive directors by Derek Higgs offered other insights. Appointed by the government in the wake of the Enron scandal in the US, the former banker found in his 2003 report that non-execs were "typically white males nearing retirement age". Fewer than 1% were from ethnic minority backgrounds and 6% were women.

Higgs pointed to the informal appointments system as a possible cause. Nearly half of the non-execs surveyed were recruited through friendships or personal contacts, with only 4% undergoing a formal interview. But is the old boys' network really the only reason for the lack of representation? Naguib Kheraj, finance director of Barclays, thinks not. "The biggest issue is really about the available pool of experienced people," he said. "If you look at the population of qualified people who might serve on a board there aren't yet that many minorities with the right experience to be prevalent at board level. But I believe that situation will change significantly over the next five to 10 years."

Mr Kheraj denies prejudice is at work in the upper echelons but he does acknowledge discrimination, bullying and unequal pay exist lower down the pay scale in the City, which can influence whether people stay at a company and put themselves forward for promotion.

Hanif Lalani, finance director of BT, denies that ethnic minority workers are deliberately kept back but does believe "unconscious processes" can work against them and it is these that need to be challenged. "People do what they've always done until they are told otherwise," he said.

Mr Kheraj and Mr Lalani oppose positive action but Sir Herman Ousley, former chair of the Commission for Racial Equality, thinks differently. He says the fact that the only black FTSE 100 board members hail from countries with some form of affirmative action is not mere coincidence. "When you look around boardrooms you will see a few Asian faces but you won't see black faces other than those from the US and Africa," he said. "But if you look at the pool underneath, that's where the ethnic minority talent is congregated. There are sufficient good quality people ... but we have to make sure they have the same opportunities as others."

There are signs of change. Barclays and BT are among companies who appear to have recognised that greater diversity is good for business. Barclays, for example, has offered bonuses to headhunters who come up with more diverse candidates. Dr Singh welcomes such measures: "You have to have more diverse people coming up through middle management in order to ensure that the supply is there for the top positions."

Another chink of light is the Race Relations Amendment Act 2001, which obliges public sector bodies to promote good race relations in all areas including recruitment. Although it does not cover private firms, the CRE says it is affecting those bidding for the more than £100bn-worth of public sector contracts. "Public bodies are demanding proof that private firms are committed to diversity or they won't use them," said Mr Webster. "When you start hitting their bottom line, all of a sudden companies start finding ways of accommodating ethnic minorities."