FCA Mandates Rules to Report Diversity Information on Listed Companies' Boards and Executive Committees
The Financial Conduct Authority (FCA) has come up with a mandate that requires listed companies to report information on the representation of women and minorities on their boards and executive committees to help investors see the diversity of their top leadership teams.
This approach by the FCA will set potential targets for listed companies. It gives flexibility to medium and smaller firms operating overseas and allows companies to decide on how to collect data from employees to show they are meeting the targets. If companies cannot meet the rules, they should explain the reason.
Listed companies have to comply with the rules for financial accounting periods starting from 1 April 2022. The FCA reviews them every three years to ensure compliance and check whether the targets are appropriate.
The FCA's new rules will speed up the pace of change around diversity and inclusion in financial services.
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.'