The accounting watchdog is asking top black and ethnic minority executives whether firms should drop the acronym “BAME”, as it mulls new rules to boost diversity. 

The Financial Reporting Council (FRC) is asking the senior leaders their opinion of the umbrella term, meaning black, Asian and minority ethnic, and to offer alternative proposals. 

The acronym, which has its roots in the anti-racist movement during the 1970s, has been widely used as a catch-all phrase in discussions around race and diversity, but has faced criticism over its lack of nuance. 

It comes as part of a study to better understand what barriers ethnic minority groups face in progressing within UK Plc, through interviewing executives across FTSE 350 companies. 

The move by the FRC, responsible for developing corporate governance standards in the UK, comes after broadcasters such as the BBC and ITV agreed to avoid using the term in news content and corporate communications. 

A report by the Sir Lenny Henry Centre for Media Diversity recommended that broadcasters drop the term and only use it in reported speech. 

However, it added that BAME should always be written out in full to ensure against the “homogenising of all ‘non-white’ ethnic groups”. 

A spokesman for the FRC said: “One of the principles of good governance is that boards should be diverse in their composition. Progress is being made on the gender in the boardroom but less so in terms of ethnic minorities. The FRC is interested in what if any barriers are to progression of this group to senior positions.” 

Regulators are increasingly looking to police language to encourage a more inclusive culture in the finance industry. In July, the City watchdog said it would ban “non-inclusive” words, including the term “Chinese walls”, in its rules and guidance. 

Last year, the Government’s Parker Review set a target for each FTSE 100 board to have at least one director of colour by 2021, while FTSE 250 boards are not expected to reach this target until 2024.