Human Capital Management – New Regulation Taking Shape
May 31, 2019 All Industries
A nascent idea in the corporate talent development space has grown and taken roots this spring.
The Investor Advisory Committee voted this spring to ask the Securities and Exchange Commission to look into human capital management issues. The group wants the SEC to consider whether public companies should disclose information about how they manage workplace relations, including training, talent development and retention, writes Davis Polk attorneys Betty Huber and Paula Simpkins.
Where did this idea come from? First raised in 2017 by a large group of investors called the Human Capital Management Coalition, the idea sat, but didn’t really sprout up until the largest asset managers began cheerleading the idea. With BlackRock, State Street and Vanguard voicing their support for companies to more thoroughly think about and articulate why and how their employees are their greatest asset, a movement is growing. But will it lead to regulation? While the SEC is considering investigating the idea of a disclosure, SEC Chair Jay Clayton has stated that he doesn’t think mandating rigid disclosures will enhance human capital. This primer on the IAC’s request to the SEC has more details on the possible regulation.