The Confederation of British Industry (CBI) has warned that unless British businesses back proposals to disclose how they plan to get more women on their boards they risk the European Union imposing mandatory targets.

The warning came ahead of the Financial Reporting Council’s (FRC) consultation on whether to change the UK Corporate Governance Code to force listed companies to publish their policy on boardroom gender diversity and report against it annually. Companies would be free to decide how to hire more women to their boards, based on specific barriers in their sector, rather than be told to meet arbitrary targets.

Former Labour trade minister, Lord Davies of Abersoch, recently recommended that UK listed companies in the FTSE 100 should be aiming for a minimum of 25% female board member representation by 2015.

Matthew Fell, CBI director of competitive markets, said: “The FRC should get on with making changes to the code because we believe that the voluntary approach, with firms reporting on internally-set targets, is the best way of improving boardroom diversity. With this issue under the spotlight in Brussels, the UK Government must mount a strong case for a ‘comply or explain’ approach to reporting, rather than imposed quotas.”

The European parliament this month called for a new law to ensure 40pc of boards were made up of women by 2020.