COMP NEWS – After a new requirement was added to the 10-K “Business” section by the US Securities and Exchange Commission last year, a survey sought to gauge how the requirement was treated by America’s largest companies. The new requirement stated that:

Specifically, the human capital disclosure must include “the number of persons employed by the registrant, and any human capital measures or objectives that the registrant focuses on in managing the business (such as, depending on the nature of the registrant’s business and workforce, measures or objectives that address the development, attraction and retention of personnel).”[3]  Prior to this amendment, Item 101(c) required the registrant to disclose only the number of persons employed by the registrant.

The survey found that diversity and inclusion disclosures were the most common, with 82% of the companies surveyed responding that they included a discussion of their commitment to diversity and inclusion.

Many companies also included a quantitative breakdown of the gender or racial representation of the company’s workforce: 41% included statistics on gender and 35% included statistics on race.  Most companies provided these statistics in relation to their workforce as a whole, while a subset (21%) included separate statistics for different classes of employees (e.g., managerial, vice president and above, etc.) and/or for their boards of directors. 

In addition, many respondents stated that they included a discussion of talent development, regarding employee training, learning, and development opportunities.

This disclosure tended to focus on the broader workforce rather than specifically on senior management.  Companies generally discussed training programs such as in-person and online courses, leadership development programs, mentoring opportunities, tuition assistance, and conferences, and a minority also disclosed the number of hours employees spent on learning and development.

While these disclosures are not necessarily indicative of what all companies are focusing on, they do shed light on the topics that investors and employees are most interested in.

Read the full story here.

For more Comp News, see our recent posts.