FCA finalises representation disclosure rules

It comes as part of the regulator’s wider diversity targets, which says that a minimum of 40% of a listed business’ board members should be women, with at least one holding a senior position on the board - such as a chair, C-suite official or a senior independent director. In addition to this, at least one board member should be from an ethnic minority background. 

As part of the FCA’s new disclosure rules, companies will have to show the regulator that they’ve complied with these targets or explain why they haven’t been able to. This approach is designed to allow flexibility for smaller firms or those based overseas. 

The rules also allow companies to decide how best to collect data from employees to show they are meeting the targets.  

The rules will be applied to listed companies for the financial accounting periods since the start of this month (1 April), with the rules being reviewed in three years’ time to make sure they’re working and to check if the diversity targets are still appropriate. 

Commenting on the news, the FCA’s executive director of markets Sarah Pritchard 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.”