The Financial Reporting Council (FRC) has
decided to amend the UK Corporate Governance Code to strengthen the
principle on boardroom diversity, first introduced in June
2010.
The amendments will require listed companies
to report annually on their boardroom diversity policy, including
gender, and on any measurable objectives set for implementing the
policy.
The FRC will also update the code to include
diversity as one of the factors to be considered when evaluating a
board’s effectiveness.
The previous code included recommendations on
merit and gender but the new code will be revised following
Lord Davies of Abersoch’s review of gender diversity of UK
boards.
“We believe this gives a further
opportunity to show that Britain’s ‘comply or explain’ code-based
approach can deliver a flexible and rapid response and is therefore
preferable to detailed legal regulation, and we urge companies to
demonstrate this as quickly as possible,” FRC chairman Baroness
Hogg said.
The new provisions on diversity will apply to
financial years beginning on or after 1 October 2012.
