The Insider Dealing (Securities and Regulated Markets) Order 2023 will align the criminal offence of insider dealing (under Part of the Criminal Justice Act 1993 (the “CJA”)) with the civil offence of insider dealing (under the UK Market Abuse Regulations (“UK MAR”)) in respect of securities and markets have been published. But is not yet in force.
Finally, the Quoted Companies Alliance has published a Small and Mid-Cap Sentiment Index, The results of which are detailed below. While Deloitte has published a report following a survey of those listed companies who were early adopters of the new Listing Rule requirements relating to Board Diversity.
Board Diversity: Deloitte Corporate Reporting Insights: Diversity & Inclusion
New Listing Rules LR 9.8.6R(9-11) and LR 14.3.33R introduced a requirement for premium and standard listed companies to provide disclosures on board and leadership diversity. In brief, companies need to report on whether it has met certain targets in relation to board diversity as at a chosen reference date including at least 40% of board members should be women, one of the senior positions (Chair, Chief Executive, Chief Financial Officer or Senior Independent Director) should be held by a female and at least one director is from a minority ethnic background. Where the targets have not been met, reasons for this should be stated. These new provisions take effect for periods commencing on or after 1 April 2022 although the Financial Conduct Authority (FCA) did encourage companies reporting on periods commencing on or after 1 January 2022 to provide such disclosures voluntarily where possible.
This article looks at how the first 30 FTSE 350 December 2022 reporters are preparing themselves for greater transparency around the board and leadership diversity. It also considers whether companies are already complying with the new Listing Rule requirements or moving their disclosures closer towards full compliance. The report found the following:
53% of companies met or exceeded the target of 40% of women on the board; 97% had at least one minority ethnic director on the board’.
70% of companies explained persuasively why workforce diversity and inclusion was important to the business but only 33% referenced diversity and inclusion in disclosures on board decision-making.
Companies that successfully integrated diversity and inclusion throughout their culture reflected it throughout the annual report, in some cases including in the Chair and CEO statements.
Only 17% of companies responded to the FCA’s call to voluntarily include the new Listing Rule diversity disclosures in full.
The Report includes several recommended actions including assessing whether the annual report explains clearly and consistently why diversity and inclusion at workforce, executive management, and board level is important to the business.
Evaluate the board’s existing approach for building diversity and inclusion into succession planning and evaluation. Consider how to report transparently in this area. When adopting the new FCA Listing Rules, consider all elements to be included - such as an identifiable statement setting out that each of the targets in the Rule – and evaluate whether this has been achieved or a plan is in place to achieve them. Make sure both mandated tables on sex or gender identity and ethnicity are included; and ensure clarity in the explanation of how data has been gathered.