By Huw Jones
LONDON (Reuters) – Financial companies face a regulatory crackdown unless they improve diversity among staff and boards, Britain’s Financial Conduct Authority said on Wednesday.
The watchdog will consider whether diversity of management teams at the firms it regulates should form part of its “senior managers regime” whereby a firm must name a senior member of staff who is accountable for an activity, FCA Chief Executive Nikhil Rathi said.
Rathi said the Nasdaq exchange in New York had taken the lead in listing rules by requiring all companies 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,” Rathi told a Women in Finance event.
A Women in Finance Charter was launched by the finance ministry five years ago. A review of progress by New Financial think tank on Wednesday showed over 70& of the 209 signatories, including the finance ministry, have met their self-imposed targets, or were on track to meet future targets.
Just over 60% of the signatories have set a target of at least 33% of female representation in senior management.
Eighty-one firms were due to hit their target by the end of 2020, but 44 of them did not do so, citing deliberately ambitious targets, and recruitment or promotion freezes due to COVID-19, the review said.
Asset manager BlackRock missed its 30% target last year, but achieved it in early 2021.
Others who missed in 2020 include Invesco, the Financial Conduct Authority, insurer AXA UK, Funding Circle, Legal & General Group, London Stock Exchange Group, Bank of England, Tesco Bank, and the Financial Reporting Council.
UK financial services minister John Glen said over half of the signatories also capture data on ethnicity, sexual orientation and disability.
“I would like that number to increase,” Glen said.
The overall level of female representation in senior management across the industry is 32%.
(Reporting by Huw Jones; Editing by Nick Zieminski and Timothy Heritage)
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