On August 26, 2020, the Securities and Exchange Commission (SEC) announced, as part of its ongoing initiative to modernize Regulation S-K disclosure, amendments that add human capital resources as a separate disclosure topic, including any human capital measures or objectives that issuers focus on in managing their business. This development follows years of mounting pressure from investors and other stakeholders calling for changes to disclosures, practices, and governance on a wide range of human capital and diversity and inclusion (D+I) topics affecting public companies, as well as the adoption by several states of new laws mandating diversity on boards of directors.
These rules changes could not be more timely. The COVID-19 pandemic has focused stakeholder attention on customer and employee safety and welfare. Companies are grappling with how to adapt to retain their workforce, provide a safe workplace, and respond to difficulties in supply chains or remote work environments. Further, social and racial inequality, spotlighted by the Black Lives Matter movement, has become not only a topic for public policy change but also an issue of corporate responsibility, as stakeholders look to companies for plans to respond to racial injustice and increase transparency in disclosing human capital matters.
In this client alert, we assess the changing seas of investor and stakeholder expectations and legal requirements related to key human capital and D+I topics.
Read our client alert.