Banks across Europe will have to consider diversity and set gender targets for their top executives for the first time under new EU guidelines.
The European Banking Authority and the European Securities and Markets Authority published a package of corporate governance guidelines for financial institutions across the EU, with diversity one of five key areas covered.
The guidelines, which come into effect from June 2018, specify the need for a “quantitative” goal for genders at boardroom level in the first such move by the two EU regulators.
It comes after Britain’s Davies review in 2015 called for women to make up a third of every FTSE 100 boardroom by 2020.
The Davies review has already called for a 33% target for women’s representation on boards of FTSE 350 companies in the UK by 2020 (PA)
In their report, the EU regulators said: “The diversity policy for significant institutions should include a quantitative target for the representation of the under-represented gender in the management body.
“Significant institutions should quantify the targeted participation of the under-represented gender and specify an appropriate time-frame within which the target should be met and how it will be met.”
The guidelines suggest firms should have a diversity policy, including career planning and measures to ensure equal treatment and opportunities for staff of different genders.
As well as gender, the report said diversity of education, age, profession and geography should also be considered in a bid to overcome the “risk of group think”.
The rules likewise aim to ensure board members can commit sufficient time to their roles, have the right knowledge, skills and experience, as well as “good repute, honesty and integrity, and independence of mind”.
The rules aim to ensure regulations are uniform across the EU and will also apply to firms with branches in the EU, which are head-quartered elsewhere.