SEC May Require More Human Capital Information From Public Companies

Last month, the U.S. Securities and Exchange Commission’s (SEC) Investor Advisory Committee (IAC) recommended that the SEC require public companies to provide additional human capital disclosures. If adopted, these new requirements would be on top of the 2020 SEC requirement that public companies disclose human capital resources such as the number of individuals employed and measures that address the development, attraction, and retention of personnel.

Specifically, this new committee recommendation would require companies to also provide more information about:

• The number of people employed, broken down by whether those people are full-time, part-time, or contingent workers;
• Turnover or comparable workforce stability metrics;
• The total cost of a company’s workforce, broken down into major components of compensation; and
• Workforce demographic data sufficient that would allow investors to understand the company’s efforts to access and develop new sources of talent, and to evaluate the effectiveness of these efforts.

The IAC also recommended the SEC consider implementing a narrative disclosure of how a firm’s labor practices, compensation incentives, and staffing fit within a company’s broader strategy. Read more here.