SEC & Human Capital Disclosures

The U.S. Securities and Exchange Commission (SEC) issued a final rule “Modernization of Regulation S-K” (effective August 2020) mandating human capital disclosures—marking the first time in over 30 years that the SEC significantly revised any disclosure requirements relating to human capital. Public companies now need to disclose “human capital resources . . . and any human capital measures or objectives” that they focus on in managing their businesses, as a part of their Form 10-K disclosures—but the SEC did not articulate specific metrics for the new disclosure requirements.

What does this mean? The lack of SEC guidance presents challenges in discerning what human capital information should be included. It is crucial for companies to consider the implications of disclosing or omitting certain human capital information and how that may impact enforcement and litigation.

As one of the only law firms with a deep Securities Enforcement & Regulation bench (more than 10 former SEC officials), a Global Human Capital practice, and an experienced Corporate and Securities Litigation team, our SEC & Human Capital Disclosures Task Force is uniquely suited to assist companies with SEC disclosures and human capital compliance. We advise clients in, among other things, preparing 10-K disclosures, communicating with key stakeholders, and supporting their workforces, while anticipating and minimizing enforcement actions and litigation risk. We also examine the guidance developing and disclosure trends to better prepare clients for potential investigations and litigation.