Financial companies in the UK are facing a regulatory crackdown unless they improve diversity on their board of directors and amongst their employees, the Financial Conduct Authority (FCA) said.
The UK's financial watchdog also said that it is considering making it a requirement for companies who wish to list in Britain to meet diversity standards.
FCA boss Nikhil Rathi made the comments as part of a speech on Wednesday, saying the regulator would "look had at the way capital markets work" as part of a review of the finance sector.
"In the US, we have seen the Nasdaq take the lead with its listing rules, which will require all companies listed on its US exchange to have, or explain why they do not have, at least two diverse directors. We will be exploring whether we should make similar requirements part of our premium listing rules," Rathi said.
Speaking at a Women in Finance event, he also said that the FCA is considering whether diversity of management teams at the firms it regulates should be part of its "senior managers regime" which requires forces firms to name a senior member of staff who is accountable for an activity.
The Women in finance Charter — launched in 2016 — is a commitment to provide a diverse, inclusive and gender balanced financial services sector by signatory firms and HM Treasury.
A new study by New Financial think thank, which looks at the progress showed that over 70% of the 209 signatories, including the finance ministry, have met their self-imposed targets or were on their way to do so.
The review indicated that more than 60% have set a target of at least 33% of female representation in senior management.
It comes after separate research showed that some of the UK's biggest companies in the FTSE 100 (^FTSE) have yet to appoint a single member of any ethnic background to their boards
The latest Parker Review shows that out of 100 of Britain's best-known firms, 16 companies, including the London Stock Exchange Group (LDNXF), International Consolidated Airlines Group (IAG.L) and BAE Systems (BA.L) have all-white boards.
It showed that 81 out of 100 firms had ethnic representation at board-level. This was up from 74 in November 2020 and 52 in January last year.
Sir John Parker, chairman of the Parker Review Committee, said the survey “represents significant progress towards the target” of having at least one director from an ethnic minority by December 2021.
The report, which was set up by the government in 2015, is based on voluntary submissions from companies. The aim of the review is to ensure that every FTSE 100 company has at least one ethnic board member by the end of 2021 "Beyond One by 21" and every FTSE 250 (^FTMC) company by the end of 2024.
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