The SEC’s Enhanced Human Capital Disclosure Requirement: What Companies Should Know

The Securities and Exchange Commission (SEC) recently announced a new human capital disclosure requirement for public companies to “reflect the many changes in our capital markets and the domestic and global economy in recent decades.” Over the past several years, human capital has become increasingly important to investors. “Human capital” generally refers to the value of a company’s workforce, which is often influenced by a company’s policies and procedures related to recruitment, retention, training, development, health and safety, diversity and inclusion, and culture. Investors see human capital as an essential component in creating long-term shareholder value and have increasingly prioritized strong human capital practices.