For those of us that have been following the new SEC Regulation S-K, it seems like quite a shock that it hasn’t gotten more attention. Public companies who report to the SEC, must now disclose material Human Capital measures publicly.
“The amendments… notably add a requirement for a company to describe its human capital resources, including any human capital measures or objectives the company focuses on in managing its business, to the extent material to an understanding of the business taken as a whole.”Source: https://www.bakerlaw.com/alerts/the-sec-votes-to-modernize-regulation-s-k
Instead of strict guidance, the SEC chose to be more flexible in it’s approach to guidance on what are human capital metrics.
“Much commentary was received in response to the proposed rules on human capital disclosure, including to encourage more specific disclosure requirements. In the final rules, the Commission continued to favor flexibility to tailor disclosures to a company’s unique circumstances, which may evolve over time, rather than require companies to use a specific disclosure framework or adopt a definition of the term “human capital.’”Source: https://www.bakerlaw.com/alerts/the-sec-votes-to-modernize-regulation-s-k
The SEC is requiring companies to disclose metrics they currently use or metrics they would likely use.
“In his statement at the Open Meeting where the rules were adopted, Chairman Clayton noted that, under the principles-based approach, he expects to “see meaningful qualitative and quantitative disclosure, including, as appropriate, disclosure of metrics that companies actually use in managing their affairs.”Source: https://www.bakerlaw.com/alerts/the-sec-votes-to-modernize-regulation-s-k
So, now HR has to work really fast to interpret and recommend which people metrics are material to the business and which can be disclosed based on the nature of the metric. Turetsky Consulting has been focused on this since September and looking at ways for our clients to use Regulation S-K to their advantage in deploying an internal and external People Analytics strategy.
We have a podcast coming 10/22 with Dino Zincarini from Turetsky Consulting and Ian Cook from Visier discussing Regulation S-K. It is fun and fascinating. Looking forward to your comments.