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Top employer code demands focus on gender and diversity when electing directors
A new financial code is urging businesses to consider ‘the benefits of diversity’ at board level including taking on more women. A quarter of FTSE 100 companies currently have no female board members.
A new financial code is urging businesses to consider ‘the benefits of diversity’ at board level including taking on more women. A quarter of FTSE 100 companies currently have no female board members.
The Financial Reporting Council (FRC) has today introduced changes to the UK Corporate Governance Code – to help company boards become more effective and more accountable to their shareholders.
The new code will demand that directors are voted in annually. Currently directors only face re-election every three years.
One of the key changes includes a plea to boards to be ‘well balanced’ and avoid ‘group think’ . There are new principles on the composition and selection of the board, including the need to appoint members on merit, against objective criteria, and with due regard for the benefits of diversity, including gender diversity, it says.
According to a report by the BBC, the government welcomed the new rules. Equalities Minister Lynne Featherstone said: "Half of all consumers are female but only 12 per cent of FTSE 100 directors are.”A more equal workplace is a more successful workplace.”
Richard Lambert, director-general of the Confederation of British Industry also welcomed the move towards greater diversity: “The FRC is right to say that boardroom appointments must be made on merit, while selecting from a wide talent pool so as to prevent groupthink. This is the best and most sustainable way to promote diversity in the boardroom.”
The code will apply to the UK’s top 350 listed companies.
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