There are just four black NHS chief executives and three black directors of nursing, although almost 14 per cent of NHS staff are from BME communities.
BME staff are 'disproportionately clustered on the lower rungs of the NHS career ladder', the report by the Department of Health-backed Race for Health programme says.
It comes as the DoH braces itself for legal action by the Commission for Racial Equality for allegedly breaching the Race Relations Act.
The CRE says the DoH failed to assess new policies or legislation for their potential impact on race relations. The case is expected to be heard in October.
The report says a recruitment drive among BME communities would improve patient care, cut costs and increase skills among NHS staff.
It calls for trusts to offer pre-recruitment support, better information on access to jobs and help for those with overseas qualifications.
Using BME recruits for new specialist services aimed at their communities would also raise employment and improve health outcomes, the report says. A more diverse workforce could provide a better channel for health information targeting local needs.
Efforts to engage
The report highlights trusts that had made good efforts to engage BME communities, such as South Birmingham primary care trust, which helped raise the NHS's profile in BME areas by giving 150 teenagers work experience.
Race for Health programme national director Professor Helen Halley said: 'Our report shows BME communities are poorly represented in the NHS, particularly at the top.
'Our PCTs have developed new ways of tackling the problem, which would otherwise be damaging the health service's reputation, costing money and slowing innovation in service delivery. These innovations must be rolled out across the NHS.'
DoH equality and human rights group director Surinder Sharma said: 'The department is committed to ensuring there are people from diverse backgrounds at all levels. of the service including in senior positions.'
A separate report by the King's Fund this week says PCTs are hampered by poor data about their BME communities.
Its audit of race equality schemes, carried out before last year's reconfiguration, found that about a third of PCTs had not published schemes on their website.
Of those that had published. a scheme online, 40 per cent showed evidence of investment in staff. or projects to improve access to services.