London (November 16, 2022) — ISS ESG, the responsible investment arm of Institutional Shareholder Services Inc. (ISS), today released an update on how FTSE AllShare constituents are progressing towards the U.K. Financial Conduct Authority’s (FCA) diversity targets slated to take effect next year.
On 20th of April this year, the FCA introduced new rules for corporate issuers regarding diversity and inclusion on company boards and executive committees with the following targets: at least 40 percent of the board are women, at least one senior board position (Chair, CEO, CFO, or Senior Independent Director) is held by a woman, and at least one board member is from a minority ethnic background. The rules are to take effect after the 1st April, 2023.
ISS ESG Director & Executives Diversity Data collated at the end of April showed that 18 percent of FTSE AllShare constituents (excluding investment trusts) did not yet meet any of these targets and that only 14 percent had met all three. Six months later and roughly five months ahead of implementation, ISS ESG finds a smaller proportion – 14 percent – of FTSE AllShare constituents were not yet meeting the targets while, conversely, those that met all three had grown by five percentage points to 19 percent. Moreover, an analysis of data as of November 1 finds that 40 percent of FTSE AllShare constituents had met the target of at least 40 percent of women on the board, 53 percent have at least one senior board position held by a woman and 64 percent have at least one minority director, up eight, five and five percentage points respectively since late April.
Guillaume Tassin, Head of Data Solutions at ISS ESG, said: “There is noticeable movement across all indicators with, for instance, more than half (53 percent) of FTSE AllShare operating companies now having at least one senior board position held by a woman. However, much remains to be done for most companies to meet FCA targets by 2023 and we expect to see a marked uptick in investors seeking to engage with portfolio companies on meeting those goals.”
Learn more about ISS ESG’s data capabilities here.
About ISS ESG
ISS ESG solutions enable investors to develop and integrate responsible investing policies and practices, engage on responsible investment issues, and monitor portfolio company practices through screening solutions. It also provides climate data, analytics, and advisory services to help financial market participants understand, measure, and act on climate-related risks across all asset classes. In addition, ESG solutions cover corporate and country ESG research and ratings enabling its clients to identify material social and environmental risks and opportunities. For more information, please visit us at: www.iss-esg.com
Sarah Ball, Executive Director, Communications
Institutional Shareholder Services Inc.