Financial Reporting Council to consult on getting more Women into the Boardroom
News types: Consultation Announcement
Published: 24 February 2011
Lord Davies has recommended that “the Financial Reporting Council should amend the UK Corporate Governance Code to require listed companies to establish a policy concerning boardroom diversity, including measurable objectives for implementing the policy, and disclose annually a summary of the policy and progress made in achieving the objectives”.
The UK Corporate Governance Code was amended in June 2010 to state that, for all UK listed companies, “the search for board candidates should be conducted, and appointments made, on merit, against objective criteria and with due regard for the benefits of diversity on the board, including gender.”
This addition to the Code has been widely supported, and encourages more active consideration of the acute gender imbalance on most boards. The FRC will consult on whether further amendments would now be appropriate to accelerate change.
Welcoming Lord Davies’ report, FRC Chairman Baroness Hogg said:
“The FRC believes that diversity at the board table can help to make boards more effective, for example by reducing the risk of ‘group think’. The change we made to the Code last year has helped to trigger a significant change in attitude to the persistent failure of companies to appoint more women to boards, depriving themselves of the benefits of the full talent pool available to them.”
“However, as Lord Davies says, progress remains slow, and so we will consult on whether to make further changes to the Code to encourage companies to report on their policies and ambitions in this respect”.
The FRC will consult on:
- Whether changes to the Code are an appropriate means of achieving more diverse and more effective boards;
- If so, what form those changes should take. The consultation will set out the options, including the amendments recommended by Lord Davies; and
- The timetable for implementing any amendments to the Code.
Notes to Editors
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The Financial Reporting Council is the UK’s independent regulator responsible for promoting high quality corporate governance and reporting to foster investment.
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The UK Corporate Governance Code sets out standards of good practice including on board composition and development, remuneration, accountability and audit and relations with shareholders. All companies with a Premium Listing of equity shares are required under the Listing Rules to report on how they have applied the Code in their annual report and accounts, and either to confirm that they have complied with the Code's provisions or - where they have not - to provide an explanation (known as “comply or explain”).