In the UK, the seminal report that has shaped gender policy to date is the Lord Davies report which was commissioned by the government and published in February 2011.  Recommendations were issued to various stakeholders including to companies and the Financial Reporting Council (FRC).  Companies were encouraged to adopt diversity targets whilst the FRC was encouraged to revise the Code in order to accommodate greater disclosures on diversity.  The Davies Report introduced voluntary targets for women on boards. Its successor, the Hampton-Alexander report, focused not only on boards themselves but on the pipeline of executive women, including the executive committee and its direct reports. 

Following its predecessors, the FTSE Women Leaders Review issued an update on the progress made on gender diversity in 2021 and set out new targets and recommendations for the next stage in the journey to gender-balanced boards and leadership teams by the end of 2025. Further to this, the Parker Review has brought the ethnic diversity of UK boards into the spotlight and issued a call to action. And in April 2022, the FCA introduced new Listing Rules (LR 9.8.6R(9) and LR 14.3.33R(1)) to require, as an ongoing listing obligation, the majority of both standard and premium listed companies to include a statement in their annual financial report setting out whether they have met specific board diversity targets on a 'comply or explain' basis, as at a chosen reference date within their accounting period and, if they have not met the targets, why not.

The 2018 UK Corporate Governance Code recommends that companies should set out clear disclosures on diversity including gender, any measurable objectives that it has set for implementing the policy, and progress on achieving the objectives.  It builds in requirements for boards to consider diversity in all its forms, including gender, social and ethnic backgrounds, cognitive and personal strengths. It calls again for regular board refreshment and proposes that diversity should be incorporated into the succession and appointment process and should be considered in board evaluations. It also introduces a reporting requirement for diversity in senior leadership, which aligns to the Hampton-Alexander report.

Pay gap disclosures

Employers with 250 or more relevant employees fall within the scope of the gender pay gap regulations, reporting on which is required to be published in April each year.

Employers publish the following information for each financial year:

  • the percentage difference in mean pay between male and female employees;
  • the percentage difference in median pay between male and female employees;
  • the percentage difference in in average bonuses received between male and female employees;
  • the proportion of men and women who receive bonuses; and 
  • the number of men and women in each quartile of pay within the workforce.

These gender pay gap disclosures are published outside the annual report.

The UK Government has consulted on introducing ethnicity pay gap disclosure regulations.

Board diversity policy

Large companies listed on a UK regulated market are also required to provide information on their board diversity policy, covering age, gender, geographical diversity, and educational and professional background, under amendments to the Disclosure Guidance and Transparency Rules (DTR) originally designed to implement the EU Non-Financial Reporting Directive (2014/95/EU) requirement for issuers to disclose their diversity policy in the corporate governance statement.  The FCA has also recently published its final policy decision on amending DTR 7.2.8AR and LR 9.8.6R to improve diversity disclosures by in scope companies.  In March 2023 it issues a PRimary Market Bulletin outlining its supervisory approach and expectations regarding these disclosures.

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