The Financial Conduct Authority (FCA) has finalised proposed rules which will require listed companies to disclose against targets on the representation of women and ethnic minorities on their boards and executive management.
The UK watchdog said that it sets positive diversity targets for listed firms and if they cannot meet them they need to explain why.
"As investors pay increasing attention to diversity at the top of the companies they invest in, enhancing transparency at Board and executive management level will help hold companies to account and drive further progress,” said Sarah Prichard, executive director of markets, FCA.
The organisation says that the new approach allows flexibility for smaller firms or those based overseas, and that the rules also allow companies to decide how best to collect data from employees to show they are meeting the targets.
The new rules have applied to listed companies since the 1st of April.
The authority said it would review the rules in three years’ time to ensure they are working.
Recent Stories