We are proposing to change our Listing Rules to require companies to disclose annually on a comply or explain basis whether they meet specific board diversity targets and to publish diversity data on their boards and executive management.
Why we are consulting
We seek to increase transparency for investors on the diversity of company boards and executive management. We also want to improve considerations of broader diversity aspects within diversity policies and related disclosures by companies.
Who this applies to
This consultation should be read by:
- UK and overseas companies that have securities admitted to listing or trading on a regulated market in the UK
- existing and prospective investors in listed companies including those admitted to a regulated market, including institutional and individual investors
- law firms, investment banks and other advisors and intermediaries who may assist issuers
- exchanges or venue operators
- intermediaries who may facilitate, including providing execution and/or marketing of, investments into issuers, whether at initial public offering (IPO) or in secondary markets
- members of a company’s board, board committees and executive management, as well as those wishing to become such members
- sponsors of listed companies
This consultation will also be of interest to:
- trade associations representing the various market participants above
- think tanks and civil society groups
- public bodies who may have an interest in promoting greater diversity
- other stakeholders with an interest in promoting greater diversity, including the Hampton Alexander Review and the Parker Review
Background to our proposals to increase transparency on diversity
We make this proposal in the context of:
- domestic and wider international initiatives to promote greater diversity on listed company boards
- increasing scrutiny of companies by investors looking at environmental, social and governance (ESG) factors, and a desire for better data to inform decisions
- academic studies which suggest that greater diversity on boards may have positive effects on corporate governance and corporate performance
Respond to this consultation
Please send us your comments by 20 October 2021.
Subject to consultation feedback and FCA Board approval, we will seek to make relevant rules by late 2021.