The Financial Conduct Authority (FCA) has published a policy statement (PS22/3) setting out rule changes that will require premium and standard listed companies to make disclosures in relation to gender and ethnic diversity at board and executive management level for financial years starting on or after 1 April 2022.

The FCA published a consultation paper (CP21/24) on its proposals in July 2021.  The proposals align with the updated targets for women on the boards of FTSE 350 companies set by the FTSE Women Leaders Review (see our blog post here) and the targets on ethnic diversity set by the Parker Review (see our blog post here).

Under the new Listing Rule requirements, premium and standard listed companies will have to include in their annual report a statement confirming whether they have met specified board diversity targets as at a reference date, chosen by the company, in the financial year. The targets are that:

  • the board comprises at least 40% women;
  • at least one of the Chair, CEO, CFO or Senior Independent Director is a woman; and
  • at least one member of the board is from a minority ethnic background (that is one of the ethnic background categories recommended by the UK Office for National Statistics, other than a white ethnic group).

Companies not meeting these targets will be required to explain why they have not done so.

In addition, premium and standard listed companies will be required to include tabulated data in their annual report on the gender identity or sex, and the ethnic diversity, of members of their board and executive management. In changes from the FCA’s original proposals:

  • the Listing Rules will allow companies some flexibility in how they collect and report on this data, reflecting potential privacy concerns raised during the consultation process; and
  • there is a specific exemption from reporting where board members or management are situated overseas and local laws in that jurisdiction prevent collection or publication of such data.

The final rules also expand the disclosures required in relation to a company’s diversity policy under DTR 7.2.8AR (see our corporate update 2016/23). Going forward, the description will need to cover factors such as ethnicity, sexual orientation, disability and socio-economic background (as well as existing factors such as age and gender). Companies will also need to disclose how their diversity policy is applied to their key board committees.

Whilst the new disclosure requirements apply for financial years starting on or after 1 April 2022, the FCA is encouraging companies to include these disclosures in their annual report on a voluntary basis ahead of this date. The FCA is of the view that, since companies can choose their own reference date against which to make these disclosures, companies could put in place the necessary processes to collect and report on this data sooner, for example for financial years starting on or after 1 January 2022.



Alan Montgomery
Alan Montgomery
+44 20 7466 2618
Sarah Hawes
Sarah Hawes
Head of Corporate Knowledge, UK
+44 20 7466 2953
Isobel Hoyle
Isobel Hoyle
Professional Support Lawyer
+44 20 7466 2725