LONDON (Reuters) – Britain’s top companies will face more pressure to increase the number of women on their boards from next year under a new code published today that stopped short of quotas seen in other European countries.
The Financial Reporting Council said its tougher rule will force listed companies to spell out annually their policy on diversity, “any measurable objectives” set to implement it and progress made.
The regulator’s code was updated last year to say diversity was a good thing.
“We believe this gives a further opportunity to show that Britain’s ‘comply or explain’, code-based approach can deliver a flexible and rapid response and is therefore preferable to detailed legal regulation, and we urge companies to demonstrate this as quickly as possible,” FRC chairman Baroness Hogg said.
While the change is effective October 2012, the FRC urged companies to voluntarily apply it immediately.
A British government-commissioned report said women should make up at least 25 per cent of the boards of big companies but did not recommend set quotas as France, Norway and Spain have introduced, or plan to.
The European Professional Women’s Network said the proportion of women on boards of top European firms rose to 12 per cent, or 571 seats, in 2010, from 8 per cent in 2004. Britain was just above the 11.7 per cent average last year, lagging Norway, Sweden and the Netherlands, its website said.
The European Union’s executive European Commission is set to publish a draft law to reform the bloc’s securities rules, and a draft obtained by Reuters showed it would “require investment firms to take into account diversity as one of the criteria for selection of members of the management body”.