"Reform or else" over race equality colleges were told this week by Trevor Phillips, chairman of the Commission for Racial Equality.
In an interview with FE Focus, he warned that colleges could have compliance orders placed on them to force them to recruit and promote more black and ethnic-minority staff.
Mr Phillips described FE's record in employing black staff as "pretty poor". He said: "We are trying to see whether there are ways in which we can encourage the sector to reform itself before it has to be reformed."
Asked if that would mean compliance orders against colleges, he replied:
"As Chris Tarrant might say, we don't want to do that, do we? I think it would be much better if the sector wakes up and makes an effort."
Two compliance orders have been issued against police forces, lambasted for institutional racism, to force them to produce action plans demonstrating they are addressing the issue.
Mr Phillips also called on colleges to make more of their unique position as agents of integration. He told FE Focus: "In some towns that are racially divided, the FE college is the only place where different kinds of young people meet.
"The FE college can make interaction possible in a way that nowhere else can. If somebody becomes friendly with someone from a different community, their sisters and parents and friends will get to meet each other.
Colleges, by encouraging students to mix, can bring families and communities together."
He urged colleges to break down segregation that may exist on site.
"Different types of students graduate to different types of courses," he said. "Colleges may have lots of Asian students studying IT but none in hairdressing, or a lot of African-Caribbean students doing legal courses but none doing catering.
"Colleges can see if they can make a special effort to attract more white students to IT, or more Asians to be legal executives, so they are not replicating that drift towards segregation that exists elsewhere. It involves paying attention to detail."
He also said colleges should provide entertainment, sport and leisure activities to encourage integration. "I would like to be sure that colleges weren't closing on a Friday night but becoming a place where black and ethnic- minority students might feel at home by doing something entertaining and fun," he said. The principal point is that institutions can be more than the sum of their services."
The Learning and Skills Council said it was conducting a survey of 100 colleges in England about their race equality procedures and numbers of ethnic minority staff.
Kit Roberts, the council's director of equality and diversity, said results so far "have shown some good practice, but also some very poor practice".
She added: "We don't want the CRE coming in and pulling us up. We need to work together to change attitudes, behaviour and practices."