Companies in Britain have been ordered to tell its shareholders the efforts they have taken to introduce diversity to the boardroom. This is part of a drive to get more women and ethnic minorities into senior positions.
According to a research by the University of Exeter Business School commissioned by the Financial Reporting Council, only 15 companies in the FTSE 100 index of biggest listed businesses comply with rules about reporting on their diversity policies.
The Financial Reporting Council is the regulatory body and chief standards setter for auditors, accountants and actuaries in the UK and Republic of Ireland. It is financed by government and industry and its directors are appointed by the business secretary.
Under the FRC’s revised governance code, companies are required to include in their annual reports a description of how they have applied their diversity policy and how that has benefited or hindered their strategic targets.
Big companies are under pressure to increase diversity on their board and they are spreading this practice to those they do business with, reported Independent back in February.
Interviews with executives and independent directors revealed that they want more diversity from their financial advisers, bankers, lawyers, public relations consultants and auditors.
Diageo, the owner of Johnnie Walker whiskey, is one such company pushing for change.
“When I go into a pitch for banking or accountancy services, I always ask about the diversity of the team,” Diageo’s chief finance officer Kathryn Mikells was quoted as saying by Independent.