Insurers have called for new rules on diversity in the boardroom to go one step further, adding simply requiring firms to disclose how well they are meeting target set is not enough.

The UK regulator the Financial Conduct Authority (FCA) announced it had finalised rules requiring listed companies to report information and disclose against targets on the representation of women and ethnic minorities on their boards and executive management.

It said the rules had been implemented to make it easier for investors to see the diversity of their senior leadership teams.

The FCA’s approach sets positive diversity targets for listed companies. If they cannot meet them, they will be required to explain the reasons for their failure.

“This approach allows flexibility for smaller firms or those based overseas,” the FCA added. “The rules also allow companies to decide how best to collect data from employees to show they are meeting the targets.”

The rules will apply to listed companies for financial accounting periods starting from 1 April 2022. The FCA said it will review the rules in 3 years’ time to make sure they are working and to check if the diversity targets are still appropriate.

“This work reflects the FCA’s focus on speeding up the pace of change around diversity and inclusion in financial services,” it added.

However, for insurers the rules do not go far enough according to the Chartered Insurance Institute.

The Institute said that the rules should more prescriptive and should contain a clear mandate which pushes affirmative action.

“Whilst we welcome the FCA’s policy statement we feel that what is still needed involves dedicated constructive planning and affirmative action to get to where we collectively feel we should be heading for the benefit of all,” said a spokesperson.  “The Chartered Insurance Institute actively measures the diversity of its Board and Executive Committee with identified actions and has long maintained that the key to innovation and success is found in properly accessing the diversity of ideas found within the full breadth of society.

“It is important to accept and understand that when our talent pool is limited, we are in fact limiting ourselves as an organisation, and therefore limiting the benefits we can bring to those we serve.

“Addressing D&I should be one of the highest priorities within the profession if we are to dismantle any unjust barriers that prevent people from accessing careers in insurance.

“Senior leaders need to understand where the barriers are that hinder the progress of talented people from all backgrounds from moving up the career ladder. “

Sarah Prichard, Executive Director of Markets at the FCA said: “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.”

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