FW Cook's review of the first 50 Form 10-Ks filed after the effective date of the new Regulation S-K human capital resources disclosure requirement by companies with a market cap greater than $1 billion revealed these takeaways:
Disclosure topics - The most common disclosure topics based on "significant" discussion (i.e., not a brief mention, but rather enough detail such that FW Cook did not deem the discussion to be generic):
The report includes two sample disclosures for most topics (to show different approaches) from referenced Form 10-K filings for all of the above topics but mental health, pay equity, and succession planning, which were less commonly discussed. Expanded headcount beyond the number of employees as required by the old rules reportedly included employee data by e.g., business segments/geography, gender, and/or ethnicity.
Length of disclosure - The median disclosure was 369 words; however, overall, disclosures ranged from nine words to 1,582. Eight companies simply disclosed their number of employees as they had done in the past (which is permissible under the new rule provided the company believes the disclosure meets the principles-based materiality standard), and three cross-referenced their CSR report, proxy, or financial statements for additional information.
See FW Cook's release and our prior report: "Reg. S-K Amendments Go Live: Risk Factors, Human Capital" and additional information & resources about the rule amendments on our Disclosure Reform page. Our Human Capital/Workforce Management page includes guidance and practical advice on human capital disclosure specifically, and our Annual Meeting/Proxy Statement page includes sample disclosures.
This post first appeared in the weekly Society Alert!