FCA confirms rules around reporting diversity on company boards

Rules that will require listed companies to report information about the representation of women and ethnic minorities on their boards and executive management have today been finalised by the FCA.

The regulator highlighted that its changes will make it easier for investors to see the diversity of their senior leadership teams.

The FCA suggested its approach sets “positive diversity targets” for listed companies and that if they cannot meet them, firms will need to explain why not. The rules also allow companies to decide how best to collect data from employees to show they are meeting their targets.  

These rules will apply to listed companies for financial accounting periods starting from 1 April 2022. The regulator also confirmed it will review the rules in three years to ensure they are working and to check if the diversity targets are still appropriate.

FCA executive director of markets, Sarah Pritchard, 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.”

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