PS22/3: Diversity and inclusion on company boards and executive management

Read PS22/3 (PDF)

What we are changing

We are introducing new Listing Rules to require issuers to include a statement in their annual financial report setting out whether they have met specific board diversity targets. We are also expanding the reporting requirements to cover the diversity policies of key board committees and to indicate that reporting on board and board committee diversity policies could consider wider diversity characteristics. 

Setting targets on a ‘comply or explain’ basis for the representation of women and people from a minority ethnic background is designed to be a positive reporting benchmark to encourage progress. However, it serves as a starting point to encourage scrutiny and consideration of diversity and inclusion more broadly, both at senior levels of listed companies and throughout their businesses.

This work reflects the FCA’s focus on speeding up the pace of change around diversity and inclusion in financial services.

Who this applies to

The companies in scope of our new Listing Rules are UK and overseas issuers with equity shares, or certificates representing equity shares, admitted to the premium or standard segment of the FCA’s Official List, excluding open-ended investment companies and ‘shell companies’ but including:

• closed-ended investment funds 
• sovereign controlled companies

We are not applying the rules to issuers of listed debt and debt-like securities, securitised derivatives or miscellaneous securities.

Our corporate governance rules apply to certain UK issuers with securities admitted to UK regulated markets and, through the Listing Rules, to certain overseas listed companies subject to existing exemptions for small and medium companies.

Next steps

In-scope companies are required to make these disclosures in their annual reports for financial years starting on or after 1 April 2022.