FCA finalises rules for listed companies to boost disclosure of diversity

The FCA has finalised rules requiring listed companies to report information and disclose against targets on the representation of women and ethnic minorities on their boards and executive management.

The new set of rules will apply to listed companies for financial accounting periods starting from 1st April 2022.

The new policy sets out positive diversity targets for listed companies to meet, including:

  • at least 40% of the board should be women
  • at least one of the senior board positions (chair, CEO, CFO or senior independent director) should be a woman
  • at least one member of the board should be from an ethnic minority background excluding white ethnic groups (as set out in categories used by the Office for National Statistics)

If the firms are not able to meet the targets, they are required to explain why not.

The rules also allow companies to decide how best to collect data from employees to show they are meeting the targets.

The FCA will review the rules in three years’ time to make sure they are working and to check if the diversity targets are still appropriate.

Sarah Pritchard, executive director of markets at the FCA, said: "As investors pay increasing attention to diversity at the top of the companies they invest in, enhancing transparency at board and executive management level will help hold companies to account and drive further progress."

Leave a comment