Most of the biggest businesses in the UK have accepted the government policies on boardroom diversity, however, their reporting to the stakeholders needs to improve further, according to a research conducted by the University of Exeter Business School for Financial Reporting Council (FRC).
This means that big companies in Britain have asked to introduce more diversity to the list of top executives as part of the wider efforts to have more women and ethnic minorities into senior positions.
“Only 15 per cent of FTSE100 companies fully complied with the UK Corporate Governance Code’s provision on diversity reporting by describing their policy on diversity, the process for board appointments, their objectives for implementing the policy, and progress on achieving them,” the new study said.
According to the FRC’s analysis, FTSE 350 companies’ approaches to diversity are wide-ranging. While some do demonstrate a deeper understanding of diversity as an issue of strategic importance, the great majority appear to treat reporting as a compliance exercise, suggesting a lack of commitment.
The new study revealed the fact that, 98 per cent of FTSE 100 and 88 per cent of FTSE 250 companies have a policy on diversity. This is a major milestone since 2012 when the rule was a part of the UK Corporate Governance Code. However, only 15 per cent of FTSE 100 businesses report against all four measures described within provision B.2.4 of the UK Corporate Governance Code.
Many companies need to do more to ensure the diversity in top positions, the study said.
The revised UK Corporate Governance Code will come into effect from January 01, next year which stresses to raise the diversity in the top posts. It asks the boards of the companies to add information on their annual reports on how they have applied their company’s diversity policy.