Firms ordered to act on diversity or face a crackdown by regulators

FCA boss Nikhil Rathi (pictured) said firms with ‘premium’ listings in London must act to improve boardroom diversty

Britain’s leading companies face a crackdown by regulators unless they improve diversity, the head of the City watchdog has warned.

In his first major speech as chief executive of the Financial Conduct Authority (FCA), Nikhil Rathi said firms with ‘premium’ listings in London must act.

He said the Nasdaq exchange in New York had taken the lead by requiring all firms to have, or explain why they do not have at least two ‘diverse’ directors.

‘We will be exploring whether we should make similar requirements part of our premium listing rules,’ Rathi told a Women in Finance event. 

He added: ‘I would encourage all capital markets participants to consider the reasons why there are so few female chief executives and chief financial officers, or chief executives and chief financial officers of colour presenting during IPOs or when capital is being raised.’ 

The FCA will monitor senior management applications to ensure there is change. 

Rathi, a former London Stock Exchange chief, said: ‘The number of women of colour in senior positions is a particular concern. 

‘This lack of diversity at the top raises questions about firms’ ability to understand the different communities they serve and their needs.’