The Government has recently published new regulations requiring quoted companies to report on gender balance and diversity, at board and management level and companies as a whole. At the same time EU commissioners have postponed plans to impose quotas for women on company boards: EU Justice Commissioner Viviane Reding was pushing for a vote on Tuesday to make it mandatory for companies to keep 40% of seats for women.
The UK has always favoured a voluntary approach to achieving gender diversity in the boardroom, rather than the mandatory quota system that has increased female representation on boards in Norway from less than 10% in 2003 to more than 40%. Although the number of women on FTSE 100 boards is highest it has ever been at 15.6% this is not considered to be high enough.
The draft Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 amend existing companies legislation on annual reporting and have been introduced to ensure clear and useable reports for shareholders and to improve the transparency and corporate governance of companies as a whole.
Under the regulations, quoted companies (those incorporated in the UK, EU or US markets) will be required to produce a report on their strategy, business model, human rights issues and details of the number of men and women on their board, in managerial positions and in their company as a whole. There is recognition that defining the overall gender balance may be difficult for global companies but it is thought that this information will be important to assist chairmen and CEOs understand and monitor the composition of their workforce.
The regulations are due to come into force in October 2013 and companies will be required to comply with the reporting requirements in any annual reports prepared after this date.