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New rules are to come into force next year requiring businesses who want to float on the UK stock markets to have four in 10 of its board members be women, or explain why not.

The Financial Conduct Authority (FCA) has said companies will need to account for diversity in their top teams and will report against targets the watchdog sets a year from now. The FCA added that some firms will not be able to meet the targets but should be able to explain why. At least 40% of a company’s directors should be women, and a woman should hold at least one of the senior board positions - either chair, chief executive, finance boss or senior independent director. At least one member of the board should be from an ethnic minority background.