The Government has rejected a proposal by the Kingsmill equal pay review to overhaul the Investors in People kitemark so that it tackles sex inequality.
The review, published last week, recommends that the IIP process should be restructured to tackle women's pay issues.
The Government claims IIP already covers equal opportunities and a voluntary work-life balance model is to be introduced.
Denise Kingsmill, who headed the review, stated that most employers agree that the IIP scheme needs to include a greater emphasis on diversity.
"IIP is an outdated system that does not work and is too bureaucratic. It has not done a good job and most of the businesses that I spoke to agree with me on this, because it has no diversity or, in particular, gender agenda," Kingsmill told Personnel Today.
"They cannot be investors in only half of the people. This recommendation came from business more than it did me, but of course IIP is under the remit of a different minister."
Peter Russian, who is director of development at IIP and is in charge of developing and extending the accreditation, defended the process.
"Investors is about reflecting good practice and development and organisations do have to demonstrate this in equality," he said.
"Changes to the standard must be best for and driven by all our customers."
The DTI also rejected other key recommendations including the proposal that public-sector board pay should be linked to diversity targets and a research centre on women in employment be established.