"New Human Capital Disclosure Requirements: An Early Read on Developing Best Practices" from Compensation Advisory Partners (CAP) reports on its review of early disclosures.
Among the key takeaways:
- Most disclosures are located in the "Description of the Business" section. Some companies are providing a few paragraphs in their 10-K with reference to lengthier disclosures in their proxy statement or other documents available on their website.
- Length of disclosures varies widely, but more robust disclosures are averaging 1,000 - 1,500 words.
Commonly addressed topics covered in disclosures (typically 3 - 6 topics depending on the company's facts and circumstances), include:
- Facts about the make-up of the work force, including total number of employees, number or percentage in each major geography, breakdowns by type of employee, including full-time, part-time and seasonal, as well as management, administrative, engineering, skilled trades and hourly workers whether union or non-union
- Statement of company culture and identification of core values
- Description of governance and oversight of human capital initiatives by the board of directors, senior management and, in some cases, various councils or advisory groups composed of employees
- Initiatives and statistics relating to diversity and inclusion
- Overview of total rewards, with greater emphasis on all-employee programs, such as retirement and welfare benefits or a commitment to living wages
- Discussion of talent development and training
- Recruiting and retention practices
- Use of employee engagement surveys
- Pay equity
- Health and safety initiatives and metrics
CAP notes that few companies are disclosing specific metrics or objectives; however, the report includes examples from some companies that have done so. The report also includes numerous examples of disclosures that CAP deemed particularly effective in addressing each of the above topics.
Access additional resources on our Human Capital/Workforce Management page.
This post first appeared in the weekly Society Alert!