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Sex Matters’ advice to companies on the FCA’s new reporting requirements

"We recommend the simplest, clearest, most neutral and most coherent approach reporting based on sex."

Last week, we reported that the Financial Conduct Authority had issued new rules about its requirements for listed companies to report on the proportion of women on corporate boards, scrapping its earlier proposal for this to be based purely on gender self-identification.

The new regulations let companies choose whether to report the composition of their boards based on sex, or based on “gender identity”. Our brief guidance for companies explains the implications of each choice. Companies can’t mix and match between sex and gender identity in diversity reporting: they must choose one or the other. We cover the pros and cons of each option, and explain how best to approach trans inclusion.

Reporting on sex is simple, coherent, prudent and consistent; reporting on gender identity is a risky and problematic option. Choosing gender identity:

  • does not serve the objective of improving female representation
  • requires a completely new and separate data collection process
  • increases complexity
  • creates risks related to data privacy
  • creates the potential for belief discrimination
  • opens companies to controversy and reputational damage.

For Women Scotland’s recently won a legal case against the Scottish government about the definition of “woman” used in legislation aimed at increasing the number of women on public boards.