Issue link: https://digital.shearman.com/i/1162884
Shearman & Sterling LLP Human Capital Management Disclosure | 37 WHAT DO STAKEHOLDERS WANT TO KNOW? While a growing number of stakeholders are joining the call for enhanced human capital management disclosure, a clear picture of what those stakeholders would like to see disclosed has yet to emerge. Some key points these stakeholders have raised in their calls for enhanced human capital management disclosure are summarized below. A proposed revision of Item 101(c) of Regulation S-K requiring a principles-based "description of the registrant's human capital resources, including in such description any human capital measures or objectives that management focuses on in managing the business (such as, depending on the nature of the registrant's business and workforce, measures or objectives that address the attraction, development, and retention of personnel)." 10 Stakeholder Suggested Workforce Disclosures: 11 KEY POINTS • Culture and empowerment (engagement, union representation, work-life initiatives) • Health and safety (injuries, fatalities, lost day rate) • Productivity (return on cost of workforce, profit/ revenue per full-time employee) • Compensation and incentives (bonus metrics, measures to counterbalance risks created by incentives) • Demographics (number of full-time, part-time, contingent, subcontracted and outsourced workers) • Stability (turnover, internal hire rate) • Composition (diversity, pay equity) • Skills and capabilities (training, alignment with business strategy, skill gaps) While engaging with boards on human capital management issues, stakeholders like BlackRock want to hear about: 12 • Oversight of policies meant to protect employees, like whistleblowing, codes of conduct and EEO policies, and the reporting structures the board relies on to assess their implementation • How the human capital management structure ensures a healthy culture and prevents unwanted behaviors • Board and employee diversity data • Consideration of linking human capital management performance to executive compensation • Reporting to the board on the integration of human capital management risks into risk management processes • Board member visits to workplaces to assess the culture and operations of the company 10 See SEC, supra note 9. 11 See HCMC, supra note 3. 12 See BlackRock, supra note 6.