FCA Wants 40% Of Company Boards To Be Filled By Women
The British listed companies now have some additional rules to follow. FCA has asked them to fill up the boards with women to the strength of 40 percent and simultaneously one director needs to be a person of colour. The action is mainly focused on setting a diversity in the top leaders of companies.
FCA added that one or more positions such as chief financial officer, chief executive or company chair should have a woman. The companies are asked to reveal how the new rules are being followed in their annual statements.
Investors in the United Kingdom take note of diversity at the top positions of any company before making investments. They believe it enhances transparency at the level of the Board and this holds the companies to drive progress further.
A latest review of the top 100 companies in the country found that female representation was 39.1 percent. It is believed the new rules may boost increase female participation at the Board level even though it would turn up challenging for companies.
Another survey found most of the top companies in the UK have one or more ethnic minority members on the board.
The new rules are applied from April 1 this year and the annual reports would be published in early 2023. FCA will review the rules over a time period of three years to ensure sustainability and simultaneously check whether the diversity is appropriate.
FCA urged the companies to even consider a wider diversity like socio-economic background, disability, sexual orientation and so on.
It is important for any economy or country to uplift the women and minority crowd to exercise equal rights and without depriving any particular segment of the population. FCA is serious and has taken a measure. It is yet to witness the outcome. The effect can be first noticed by early 2023 and thereafter in the next couple of years.