Financial firms to set targets for female board members
Most big financial firms will have to set a target for the number of women on their board of directors from 2014.
The rules are part of a binding European Union Directive.
As well as setting a target, big banks, building societies and investment firms will also have to explain how they are going to meet their goal.
In April, a report from Cranfield University showed women held just 17% of the board positions among the companies listed on the FTSE 100.
Of those firms, Burberry has the highest proportion of female directors on its board with three out of eight.
It is also the only FTSE 100 company to have two female executive directors - chief executive Angela Ahrendts and chief financial officer Carol Fairweather.
The rules came to light after the two UK agencies that regulate the financial services industry, the Prudential Regulation Authority and the Financial Conduct Authority published consultation papers on the European Union's Capital Requirements Directive IV.'Step change'
Part of the directive looks at how company boards are composed.
It says that large financial firms will have to establish a nomination committee which will help select the board of directors and decide on a "target for the representation of the underrepresented gender on the management body and how to meet it."
"This is the first time that a regulatory requirement to set gender targets for senior management teams has been imposed on UK businesses," said Linda Jones, a lawyer at Pinsent Masons.
"These proposals, which emanate from an EU directive, represent a step change for financial institutions.
"If the regulations are seen to be helpful in financial services, it would seem only to be a matter of time before they are rolled out to other sectors," she said.
But Helena Morrissey, the founder of the Thirty Per Cent Club aiming to raise the number of women in boardrooms, says the new regulation is not necessary.
"The UK is already making strong progress and to some extent any regulatory measures emanating from EU might seem academic as large banks already have stated targets.
"Our belief is that, as more women join boards without the imposition of quotas, the more they can demonstrate the value they can add.
"By the time we get to 30%, the system will be self-perpetuating," she said.