The biggest UK firms should have at least one black, Asian, or minority ethnic (BAME) member on their boards by 2021, business group the CBI has said.
Backed by companies such as Microsoft and law firm Linklaters, it said firms needed to set "clear and stretching targets" to improve diversity.
Currently more than a third of FTSE 100 firms do not have ethnic minority representation at board level.
The CBI said progress had been "painfully slow".
The industry group said research from consultants McKinsey showed that companies with more gender and ethnic diversity were likely to be more profitable than their peers.
However, many of the biggest FTSE-listed companies had failed to boost diversity at the top, despite government recommendations made back in 2016.
The CBI said companies now needed to publish tougher targets for themselves within 12 months.
It called for FTSE 100 firms to have at least one racially and ethnically diverse board member by the end of 2021, and for smaller FTSE 250 firms to have the same representation by 2024.
And it urged them to foster "transparent dialogue" with employees, offer more mentoring and support, and work with a more diverse set of suppliers, including minority-owned businesses.
Lord Karan Bilimoria, the first president of the CBI from an ethnic minority, said: "The time has come for a concerted campaign on racial and ethnic participation in business leadership. Progress has been painfully slow."
Hugh Milward, general manager for corporate external and legal affairs at Microsoft UK, said: "We are on a journey to increasing diversity across Microsoft, and in particular at our most senior levels.
"But when more than a third of leading organisations still don't have any ethnic minority board representation, the pace of chance is too slow. Without commitment, there is no action."
Richard Houston, UK boss of consultancy Deloitte, said the Black Lives Matter movement had "given a fresh sense of urgency around racial diversity in business".
The movement, which began in 2013, became a global phenomenon after black man George Floyd was killed by US police officers earlier this year.
On Wednesday, the state of California in the US signed into law a bill requiring public companies to name at least one minority or LGBTQ director to their boards by the end of 2021.