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Sen. Warner Presses SEC

Senate Banking and Finance committee member, Sen. Mark Warner (D-VA), pressed the SEC to amend Regulation S-K and require companies to inform investors on their management of the employee workforce. Specifically, in figures scoping issuer’s workforce diversity demographics, employee turnover, employee compensation and business resource group offerings. Ushered in by a 2015 McKinsey report linking companies with more employer on-the-job learning programs to greater financial performance, these figures are argued to add another layer to the investment due diligence process (much like those from increased environmental, social and governance related disclosures). Shareholder proponents, in the past couple years, have stated these metrics could underscore a company’s edge in recruiting and retaining top talent, and provide a look into the breadth of diversity in various tranches of the workforce amid a competitive labour supply crunch.

Last proxy season, the handful of shareholder resolutions calling for reports on gender/ethnic pay gaps, disclosure of federal EEO-1 data and employee diversity reports (mainly repeat proposals) received 36% support on average. Over the last calendar year, about one-third of S&P 500 companies (36%) disclosed the percentage of women in the workforce, the average was 38%. For the fraction of the SPX (13%) that disclosed the percentage of minorities in their workforce, the average was 31%.