The rules will apply to listed companies for financial accounting periods starting from 1 April 2022, and the FCA will review the rules in three years’ time.
Sarah Pritchard, Executive Director of Markets at 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.”
Airmic members were well represented among the 540 respondents to the FCA Consultation Paper, said Glenn Ellis, Airmic’s ESG Ambassador.
“The recent announcement from the FCA, to finalise proposals for transparent diversity and inclusion disclosures by listed companies, could not have been more timely,” said Ellis.
“ESG has risen to the top of the board’s agenda and it is clear that companies can no longer be driven purely by ‘shareholder supremacy’, and at any cost.”
The FCA’s Discussion Paper, and subsequent Consultation Paper, have produced the following ‘comply or explain’ statement targets:
- At least 40% of the board should be women.
- At least one of the senior board positions (Chair, Chief Executive Officer (CEO), Chief Financial Officer (CFO) or Senior Independent Director (SID) 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).
For more information the rules concerning diversity and inclusion on company boards and executive management, read the FCA policy statement here.