UK plc to report on board diversity

The UK's public companies will have to report annually from next year on their boardroom diversity policy, including gender composition as well as any progress goals set to improve the male-female ratio in British boardrooms, regulators said on Tuesday.

The decision by governance watchdog the Financial Reporting Council to update the Combined Code – the regulation book for public companies – follows a report by Lord Davies earlier this year that found it would take 70 years at the current rate for British boardroom to be gender balanced.

The FRC will also update the rulebook to include the diversity of the board as one of the factors to be considered when evaluating its effectiveness. The changes will apply to financial years beginning on or after 1 October 2012.

Baroness Hogg, FRC chairman, said: "The changes we are announcing today, which were strongly supported in our consultation, will reinforce the code's principles by requiring companies to report on measurable objectives and progress in this important area.

It is hoped the move will stake off any initiative to introduce a quota for the number of women on boards as in Norway.

Hogg added: "We believe this gives a further opportunity to show that Britain's 'comply or explain', Code-based approach can deliver a flexible and rapid response and is therefore preferable to detailed legal regulation, and we urge companies to demonstrate this as quickly as possible".

Prime minister David Cameron is set to claim early success in the drive to recruit more women to the UK's boardrooms on Wednesday when it is expected Lord Davies will announced that nearly a third of all FTSE 100 appointments have gone to women since Davies published his report in February.

FTSE 250 companies are faring less well however with nearly half still having all-male boards, according to a progress report.