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New legislation on annual reporting might see UK companies stating the number of females employed in total, as well as the number of females appointed to senior posts, the government has announced.
The new rules are a response to recommendations made by Lord Davies and are expected to come into force in 2013. Business minister Jo Swinson believes that the reform will promote diversity and culture change in companies.
The proposed changes aim to make business more transparent to shareholders. Other key reforms proposed by the government include removing “clutter” from annual reports, so that stakeholders will find it easier to assess a company´s performance.
Swinson explains that the UK is known for being a global leader in annual reporting and the changes will ensure that the highest standards are met. Still, she points to the fact that in recent years reports have become more complex and lengthy, which makes it harder for shareholders to find what they are looking for.
Under the new legislation, companies will have the opportunity to present stakeholders with “innovative and engaging” reports that follow the latest best practices, while the requirement to report the number of senior women employees will motivate companies to appoint more women who can give a fresh perspective on business, she adds.
Helen Wells, director of campaign group Opportunity Now, welcomed the news and commented that the government plans for reform highlight the importance of the Lord Davies review, as words are now being put into action.