Last Fall, we reported that the Securities Exchange Commission (SEC) was deliberately vague in its new requirement that publicly listed companies subject to the SEC’s reporting requirements disclose a description of their “human capital resources.” For this first proxy season of disclosure, the human capital disclosure requirements came into effect in the midst of a global health pandemic that wreaked havoc on workforces across the value chain and on the heels of a tumultuous year that required communities and businesses to directly address unhealed wounds of the 2020 social justice movements. These global overlays only fueled the calls for businesses—private and public—to address and disclose their environmental, social and governance (ESG) matters at all levels of the business.

A significant ESG matter that has captured the attention of all parties shaping the ESG dialogue is an organization’s approach to and management of its human capital, or simply, its people. An organization’s approach and management of its talent, typically, the purview of human resources, has shifted to be a prominent topic for boards of directors. For the SEC, this has become a topic that warrants disclosures to investors so that investors are informed of the material issues related to their investments.

Against this backdrop and vague requirements, registrants had wide discretion to shape their first human capital management disclosure. To gain further perspective, Seyfarth analyzed the HCM disclosures across a number of industries.