Glass Lewis has submitted a response to the UK Financial Conduct Authority (FCA) consultation on the topic of “Diversity and inclusion on company boards and executive committees”. The consultation aims to increase transparency and ultimately promote greater board diversity. The FCA has proposed to amend the Listing Rules and disclosure and transparency rules relating to corporate governance in order to:
- Set board composition targets, to apply on a comply or explain basis:
- At least 40% of the board should be women (including those self-identifying as women).
- At least one of the senior board positions (Chair, Chief Executive Officer (CEO), Senior Independent Director (SID) or Chief Financial Officer (CFO)) should be a woman (including those self-identifying as a woman).
- At least one member of the board should be from a non-White ethnic minority background (as referenced in categories recommended by the Office for National Statistics (ONS)).
- Require companies to publish data in their annual financial report on the composition of their board and the most senior level of executive management by gender and ethnicity.
- Expand existing diversity disclosure requirements to also address how diversity policies apply to the key committees of the board, and clarify that the aspects of diversity to which the diversity policy may relate could include, for example, ethnicity, sexual orientation, disability and socio-economic background.
Glass Lewis is broadly supportive of the proposals. You can download our full response here:
For more information on Glass Lewis’ approach to proxy research, contact:
GROW@glasslewis.com (Institutional Investors) | ENGAGE@glasslewis.com (Public Companies)