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FCA considers requiring diverse directors on company boards

CEO Nikhil Rathi says the Nasdaq has 'taken the lead' on diversity in listed companies in the US

UK regulator the Financial Conduct Authority (FCA) has said it will explore whether to require listed companies to have at least two diverse directors.

Speaking at the launch of the Women in Finance Charter annual review last week, CEO Nikhil Rathi (pictured) said: “In the US, we have seen the Nasdaq take the lead with its listing rules, which will require all companies listed on its US exchange to have, or explain why they do not have, at least two diverse directors.

“As part of our regulatory work on diversity and inclusion and the listings framework, we will be exploring whether we should make similar requirements part of our premium listing rules.”

The FCA was one of 44 signatories to the Women in Finance Charter that missed its 2020 targets.

See also: – A third of firms missed gender diversity targets

Rathi said: “As an employer, we are determined to improve our own diversity and to work on our culture to ensure it is inclusive.”

Firms are already taking diversity concerns at companies into consideration. For example, Legal & General has already warned it will vote against FTSE 100 companies with all-white boards.

Rathi concluded: “I would encourage all capital markets participants to consider the reasons why there are so few female CEOs and CFOs or CEOs and CFOs of colour presenting during IPOs or when capital is being raised – are there challenges in the culture of private equity, underwriting, equity syndication? What more can we do to sponsor and celebrate female business leaders and entrepreneurs?”