FCA Publishes Final Rules on Board and Executive Management Diversity and Inclusion


The Financial Conduct Authority ("FCA") has announced new Listing Rules ("LRs") and changes to the Disclosure Guidance and Transparency Rules ("DTRs") on board and executive management diversity and inclusion in its policy statement PS 22/3.

The new rules (summarised below) come into force for financial years beginning on or after April 1, 2022, and apply to United Kingdom and overseas issuers with equity shares or certificates representing shares admitted to listing on the premium and standard segments of the Official List maintained by the FCA.

The first annual financial reports subject to the new rules will be published in early 2023.

In-scope issuers will be required under new Listing Rules (LRs 9.8.6R(9)/(10) and 14.3.33R(1)/(2)) and related guidance (LRs 9.8.6IG and 14.3.36G) to:

  • confirm in a "comply or explain" statement whether or not they have met the following prescribed gender and diversity targets as at a specified reference date during the relevant accounting period:

    • at least 40% of the board are women;
    • at least one of the senior board positions (including the chair, chief executive officer, chief financial officer or senior independent director) is held by a woman; and
    • at least one member of the board is from a minority ethnic background (defined by reference to categories recommended by the Office for National Statistics ("ONS")), excluding those listed, by the ONS, as coming from a white ethnic background;
  • publish numerical data on the sex or gender identity and ethnic diversity of their board, senior board positions and senior executive management; and
  • publish an explanation of their approach to collecting the data required for the "comply or explain" statement, including collection methods and data sources.

DTR 7.2.8 AR has also been amended to require any in-scope issuer to disclose in their corporate governance statement the diversity policy applied to their board, or explain where no such diversity policy is applied.