The Financial Reporting Council (FRC) has announced its decision to amend the UK Corporate Governance Code to strengthen the principle on boardroom diversity which was first introduced into the Code in June 2010.
The amendments the FRC announced will require listed companies to report annually on their boardroom diversity policy, including gender, and on any measurable objectives that the board has set for implementing the policy and the progress it had made in achieving the objectives. The FRC will also update the Code to include the diversity of the board, including gender, as one of the factors to be considered when evaluating its effectiveness.
The current revised Code, which came into effect in June 2010, included for the first time a principle recognising the value of diversity in the boardroom, which states that, “The search for board candidates should be conducted, and appointments made, on merit, against objective criteria and will due regard for the benefits of diversity on the board, including gender”.
In May 2011 the FRC issued a consultation document seeking views on whether the Code should be revised as recommended by Lord Davies of Abersoch in his review of the gender diversity of the boards of UK-listed companies published in February 2011. The vast majority of respondents supported the amendments proposed, which the FRC is now in the process of implementing.
The new provisions on diversity will apply to financial years beginning on or after 1 October 2012. This will provide the FRC with an opportunity to consult on other changes to reflect the current discussions around narrative reporting and effective company stewardship. However, the FRC strongly encourages all companies voluntarily to apply and report on the diversity additions to the Code with immediate effect.
To read The Feedback Statement: Gender Diversity on Boards visit the FRC website
source: FRC press release
Published: October 2011 To the best of our knowledge the information is correct at the time of publishing. Whilst every care has been taken to ensure that the information provided is accurate, the Institute of Directors cannot accept liability for any errors or omissions. The Institute of Directors is not responsible for the content of any external internet sites listed. all information included on the iod.com site is intended for information purposes only. We make no representations or warranties as to the accuracy of the information contained on the iod.com site, and you should take appropriate steps to verify it. Please see the full Terms and Conditions governing its use.
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