The City regulator will allow UK firms to choose whether they use sex or gender as the basis for reporting on workplace diversity.
The watchdog bowed to pressure after hundreds of activist groups raised objections to including trans women in gender diversity targets. The new rules mean the Financial Conduct Authority has scrapped requirements for listed companies to count self-identifying women among female employees.
“We consider this approach will avoid prescription in an area that is sensitive and where views are evolving in both public policy and wider social debate,” the FCA wrote in a report. The regulator also cited “privacy concerns” in its explanation of the rule change.
“This looks like yet another example of anti-trans organisations targeting something which is inclusive of trans people – we have seen that happen regularly,” commented Bobbi Pickard, a diversity consultant for BP and the chief executive of Trans in the City, a group promoting greater inclusion in business.
“Most global organisations are so far ahead of government guidelines that they are already including trans people in their reporting,” she continued. “Big business knows inclusion is the way forward.”
Under new guidelines the FCA will require at least 40 per cent of company board members to be women and for at least one member to come from an ethnic minority background. The regulator has removed the term “non-White” from its proposals over concerns it caused offence.
The Government Equalities Office estimates that between 200,000 and 500,000 trans individuals live in the UK with the regulator estimating that the number of trans people represented in senior business positions is “very small.” The FCA said its diversity and inclusion requirements will be reviewed again in three years time.