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Reporting council consults on boardroom diversity

CBI rejects calls for quotas

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The Financial Reporting Council (FRC) opened up a consultation on the issue of boardroom diversity on Thursday and the Confederation of British Industry (CBI) has already made the case against a quota system.

The CBI said it is keen to see more women on boards of top firms but backed a “comply or explain” approach to encourage an adjustment process.

Issues being consulted on by the FRC are centred around the prospect of changes to the UK Corporate Governance Code to oblige listed companies to publish their gender diversity policies and report on the subject on an annual basis.

A government-commissioned report published in February by Lord Davies of Abersoch recommended that the FRC amend the governance code to require more reporting on gender diversity but there have also been calls for a quota system to be introduced.

Commenting on the publication of a new consultation document, FRC chairman Baroness Hogg said: “Diversity widens the perspectives brought to bear on decision-making, avoids too great a similarity of attitude and helps companies understand their customers and workforces.”

“A board with too few women on it risks a weakness in at least one of these respects,” she said, adding that the pace of change in this context over “recent years has been glacial”.

“We have been calling for action to get more women on boards and believe that encouraging companies to report on their progress is the best way to achieve this,” said Matthew Fell, CBI director for competitive markets.

“With this issue under the spotlight in Brussels, the UK government must mount a strong case for a ‘comply or explain’ approach to reporting, rather than imposed quotas, to promote diversity.”

See also: CFO World editor Michelle Perry’s blog - It is not all about sex


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