The FCA has revealed today that it 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, making it easier for investors to see the diversity of their senior leadership teams.
The FCA’s approach is contained in Policy Statement PS22/3, Diversity and inclusion on company boards and executive management which sets positive diversity targets for listed companies. If they cannot meet them, they need to explain why not. According to the FCA, this approach allows flexibility for smaller firms or those based overseas. The rules also allow companies to decide how best to collect data from employees to show they are meeting the targets.
The rules will apply to listed companies for financial accounting periods starting from 1 April 2022. The FCA says that it will review the rules in three years’ time to make sure they are working and to check if the diversity targets are still appropriate.
This work reflects the FCA’s focus on speeding up the pace of change around diversity and inclusion in financial services.
Sarah Pritchard, Executive Director of Markets at FCA commented:
“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.”