Companies listed in the UK have been told by the country’s financial watchdog that women should hold at least 40% of board seats in a new push to ensure diversity in senior management positions.
Financial Conduct Authority on Tuesday Published The long-awaited rules for increasing representation among companies registered in London. These are targets for increasing the number of women in boardroom positions, including senior positions such as CEO or CFO, and ensuring the boards of at least one ethnic minority member.
The FCA stopped setting mandatory quotas, but instead asked companies to comply or explain why they could not reach targets.
Listed companies are required to disclose in annual financial statements a standard numerical table on the diversity of their board of directors and executive management by gender and ethnicity.
While many larger companies in the FTSE 100 have already complied with the previous rules set by the FCA, the new policy is expected to add pressure on smaller groups in the FTSE 250 who are lagging behind in efforts to introduce greater diversity.
More than 72 FTSE 350 companies last year did not meet previous government-supported targets for women to hold a third of board positions, according to the FTSE Women Leaders Review data set up to increase gender equality at the senior level.
Sarah Pritchard, FCA’s Marketing Director, said: “As investors pay more attention to diversity at the top of the companies in which they invest, increasing transparency at the board and management level will help account for companies and drive further progress.”
According to the survey, women’s representation on boards averaged 39.1 percent over the FTSE 100 in 2021. But it was lower than the FTSE 250 at 36.8 percent, and 37.6 percent for the FTSE 350.
Women held less than a third of the FTSE 350 leadership positions in 2021, with only 18 women and 49 CFOs across the FTSE 350.
The FCA will review the policy in three years to assess its impact. The rules will apply to accounting periods beginning on or after April 1, 2022, which means that new disclosures will begin to appear in the annual financial statements from the second quarter of 2023.
The watchdog’s goals are in line with those set by the government – backed FTSE Women Leaders Review, which has taken over the making of voluntary recommendations to FTSE 350 companies from the Hampton Alexander Review.
The FCA already is Advice On the rules since last summer. He said most companies supported the policy but had some concerns about data privacy.
The watchdog changed an earlier suggestion that would define female representation as one who identifies as female, rather than by sex at birth. The responses raised concerns about unintended consequences and argued that the policy approach would be inconsistent with equality legislation.
Some responses have warned that self-identified gender-based goals may also lead to more men by gender on boards if they identify as women, jeopardize the data by accumulating trans women and biological women and thus prevent surgery on each group, and allow men to “play goals.”
The FCA said it was up to companies to decide whether to report based on gender or gender identity.
Financial regulator moves to boost number of women in UK boardrooms Source link Financial regulator moves to boost number of women in UK boardrooms