IAC Meeting

[In late March, 2019], the Investor Advisory Committee (IAC or Committee) to the Securities and Exchange Commission (SEC) voted to ask the SEC to further investigate and evaluate whether public companies should be required to disclose information related to human capital management (HCM), in other words, how companies manage workplace relationships including training, talent development and retention.

Over the last few decades, as the US economy has increasingly become based on technology and services, certain investors have expressed more interest in HCM disclosure.

Although the vote carried, close to one-third of the IAC members dissented. Some of the most controversial points centered on (i) augmenting current disclosures of executive compensation to include summaries of broader workforce compensation and incentive structures; (ii) measuring worker productivity; and (iii) disclosing the number of full-time, part-time and contingent workers. Certain commentators feared that this language was simply a blueprint for line item disclosure requirements.

The Committee recommended that the SEC consider requiring HCM disclosure and, to aid in its decision-making, seek input from a wide range of stakeholders, including investors, issuers, asset owners and academics.

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