WiredGov Newswire (news from other organisations)
FRC: Research shows that more companies should treat diversity as part of business strategy
The majority of the UK’s largest companies have adopted policies on boardroom diversity but their reporting to stakeholders needs to improve. Research conducted for the Financial Reporting Council (FRC) by the University of Exeter Business School shows that only 15% of FTSE100 companies fully complied with the UK Corporate Governance Code’s provision on diversity reporting by describing their policy on diversity, the process for board appointments, their objectives for implementing the policy, and progress on achieving them.
The FRC’s analysis shows that FTSE 350 companies’ approaches to diversity are wide ranging. While some do demonstrate a deeper understanding of diversity as an issue of strategic importance, the great majority appear to treat reporting as a compliance exercise, suggesting a lack of commitment.
The revised UK Corporate Governance Code, which takes effect from 1 January 2019, require improved reporting on diversity. It calls on boards to include in their annual reports a description from their nomination committee of how they have applied the company’s diversity policy including how this links to progress on achieving company objectives.
The revised Code has a renewed emphasis on succession planning and diversity reporting, encourages boards to think beyond gender diversity and to act to ensure appointment and succession planning practices promote diversity more broadly. The changes encourage companies to build diversity across their workforces to feed the development of a diverse pipeline for succession to senior management.
Board Diversity Reporting in 2018 provides a snap shot of diversity reporting across the FTSE 350 and identifies examples that lead the way in terms of quality and approach.
The key findings of the research include:
- 98% of FTSE 100 and 88% of FTSE 250 companies have a policy on board diversity, a considerable improvement since 2012 when this was first included in the UK Corporate Governance Code.
- However just 15% of FTSE 100 companies report against all four measures stated within provision B.2.4 of the current UK Corporate Governance Code.
- Some companies are embracing the spirit of diversity in their narrative reporting but many need to develop a clearer strategy to drive greater diversity at senior management level.
Tracy Vegro, FRC Executive Director of Strategy and Resources said,
“There is almost universal acceptance that diversity contributes to more effective decision-making and mitigates the danger of group think. Some of the findings of this report are disappointing and FTSE 350 companies should provide fuller disclosures on all diversity.
“We expected to see more of our largest companies providing greater information about their approach to boardroom diversity and insights on the actions they are taking to increase diversity at all levels, particularly those in the current UK Corporate Governance Code. To maintain a competitive edge and success over the long-term, UK companies need to consider how diversity and inclusion is relevant to the markets in which they operate, all their stakeholders and the communities they serve.
We are writing to companies to challenge them to take a more strategic approach to diversity and inclusion, and to consider their approach to reporting on it.”
Minister for Women, Victoria Atkins said:
“It is essential that we maximise the contribution that women make to our economy - if we want our organisations or projects to succeed we had better include women. There are more women in work than ever before; more women-led businesses; more women on FTSE boards; and, more female MPs than ever before. In 2017, we introduced ground-breaking regulations, requiring large companies to publish their gender pay gaps.
“But only about a quarter of FTSE 350 board positions are occupied by women, with eight all male boards still existing. We must continue to show that in today’s fast paced, competitive market, we are driving towards diversity in boardrooms.”
Professor Ruth Sealy, Associate Professor of Management, Director Exeter Centre for Leadership, University of Exeter, said,
“Our research revealed some companies’ sophisticated understanding of the contribution diversity can make to their business - as the optimal utilisation of talent and a significant strategic issue. However, many organisations appear to still have a minimalist ‘tick box’ approach and need clearer strategies to drive greater diversity at senior management levels.”
Notes to editors:
- The FRC’s mission is to promote transparency and integrity in business. The FRC sets the UK Corporate Governance and Stewardship Codes and UK standards for accounting and actuarial work; monitors and takes action to promote the quality of corporate reporting; and operates independent enforcement arrangements for accountants and actuaries. As the competent authority for audit in the UK the FRC sets auditing and ethical standards and monitors and enforces audit quality.
- All Press enquiries should be directed to:
- Peter Timberlake, Head of Communications, on telephone: 020 7492 2397/ 07768 502332, or email: email@example.com.
- Rita Carolan, Communications Manager, on telephone: 020 7492 2307/ 07428 149096 or email: firstname.lastname@example.org.
- Alana Sinnen, Communications Manager, on telephone: 020 7492 2395/ 07949 005526 or email: email@example.com.
- If you no longer wish to receive press releases from the FRC please email firstname.lastname@example.org
Contact the Press Office
Rita CarolanCommunications Manager
- +44 020 7492 2307
Latest News from
WiredGov Newswire (news from other organisations)
RoSPA and NEBOSH sign MoU to enhance safety at work and beyond14/04/2021 14:25:00
RoSPA and NEBOSH have signed a Memorandum of Understanding to further their close, long-established working relationship.
Audit Wales - Welsh Government and NHS Shared Services responded well in challenging circumstances to source Personal Protective Equipment14/04/2021 12:05:00
Working collaboratively, NHS Shared Services and other public services overcame early challenges to provide health and care bodies with the required PPE without running out of stock at a national level.
NHS Confederation - Updated vaccination guidance welcome but caution still needed14/04/2021 11:05:00
Ruth Rankine, director of the NHS Confederation’s PCN Network, commenting on the updated vaccination guidance from the JCVI
GDP: Sectors with greatest ground to make up need more targeted support13/04/2021 14:05:00
TUC General Secretary Frances O’Grady has commented on today’s (Tuesday) GDP figures, which show a small gain in February, but the economy still 7.8% below pre-pandemic peak and consumer-facing services 18.6% below pre-pandemic levels.
NHS Confederation - Visa extension welcome; long-term workforce strategy still needed13/04/2021 10:40:00
Layla McCay, director of policy at the NHS Confederation responded to the announcement that a free one-year visa extension will be given to eligible healthcare workers and their dependants
WWF - Major businesses call for core environmental standards for food trade13/04/2021 09:40:00
Co-op, Iceland, Waitrose, Nestlé and Pilgrim’s Pride urge UK government to align trade with environmental ambition
TUC urges shoppers: ask about ventilation to keep shop workers safe12/04/2021 15:05:00
The TUC in Yorkshire & the Humber is today (Monday) urging shoppers to help keep shop workers safe by asking about ventilation in stores.
TUC: ‘As we reopen the economy, we must not drop our guard on workplace safety’12/04/2021 14:05:00
TUC North West Regional Secretary Lynn Collins commented on today’s easing of restrictions across the North West
We must not drop our guard on workplace safety as we reopen, warns TUC12/04/2021 12:20:00
TUC General Secretary Frances O’Grady commented on today’s (Monday) easing of restrictions.