SEC Human Capital Disclosure updates and a call to action for all CHROs

The SEC Human Capital Disclosures discussion is heating up again.  The SEC indicated it will propose a rule in 2022 focused on enhancing disclosures about companies’ human capital management.  

Many investment firms are pushing hard for this disclosure and even if you aren’t PE backed or a public company, when these mandates become a reality, there will be a trickle down effect to all HR functions.

IMHO, this is all really good news for the visibility and progress towards getting the backing for more data driven tool and resources for HR functions.

With more data, comes a more strategic role for HR and ultimately, better employee experiences.

In this vlog recording we highlight excerpts of the letter to Chair Gensler from the Working Group on Human Capital Accounting Disclosure Petition for Rule Making as well as the SEC open meeting held on 09.21.2022 IAC (Investor Advisory Committee ) Meeting Part 01 where the SEC invited a panel* to share their findings, perspectives and actual measurements.

The findings show how difficult and time consuming it is to find quantitative human capital measures that investors can use to evaluate the future profitability of a firm.

I have not found anything in my research about when the decision will be made but as a senior HR leader, it is important to stay up to speed on the SEC mandate for human capital disclosures even if you are not in a public company.

It is also very apparent to me that academia, research firms and investors are trying to make these recommendations without the voice of many practitioners and CHRO/CPOs who have great knowledge about the topic.


In future HR Mastermind meetings we will be brainstorming on how the CHRO Partners’ community can create universal standards, KPI and signals that our companies are focused on our biggest asset - our people.  That we are measuring what matters and how that translates to better business outcomes.

This is a moment in HR that we can’t sit by and let happen to us.

If you are a CHRO or direct report to CHRO and you’d like to learn more about how to join the conversation with a very smart group of modern HR leaders, please apply here and schedule time to learn more:


https://www.chropartners.com/

* Panelist

“The panel is structured in two parts. So, the first part, Kavya Vaghul and Ethan Rouen will review the causes and consequences …And the second part, Christine Shaw and Ty Graham will discuss human capital and value creation”

“Kavya Vaghul is an independent researcher whose highly regarded work on wages, job quality, equity and other worker policies, was featured at the U.S. Department of Labor's Good Jobs Summit. Kavya was most recently the senior director of research or JUST Capital, where she and her team produce market useful research on workforce disclosure, fair and living wages, benefits, U.S. job creation, especially among frontline workers and labor issues more broadly.
 
Ethan Rouen is an Assistant Professor of Business Administration in the accounting and management unit at Harvard Business School, where he teaches the elective course, Reimagining Capitalism, and he's also the faculty co-chair of the Impact-Weighted Accounts project at Harvard Business School. Ethan's current research interest focuses on understanding economic inequality, and the measurement of human capital.

 Tye Graham, Executive Vice President, Chief Human Resources Officer for Amalgamated Bank. Tye is responsible for Amalgamated's human resources strategy, planned focus on building culture, and attracting development -- developing, retaining, and engaging our most valuable asset, our colleagues -- his colleagues. This includes talent acquisition and development, compensation, benefits, payroll, and internal communications.
 
Tye joined Amalgamated in 2021, and previously served as senior vice president of top management at Eastern Bank. He's also held senior HR roles at G.E. Capital, Sun Life Financial U.S., Bank of America, and Citizens Financial Group.
 
Christine Shaw, who is Principal Investment Officer, for corporate governance and sustainable investment for the Office of the Connecticut State Treasurer. Prior to joining the Connecticut Treasury, Christine was a litigation associate with the Law Firm of Day Pitney, specializing in products liability defense and commercial litigation. And she's also a member of the Board of Directors of the 30 Percent Coalition and has served as a member of the boards of the United Way of Connecticut, the Glean Fund [phonetic sp], and Hartford Public Library. “

The Youtube recording of this SEC Investor Advisory Committee can be found in it’s entirely at:
https://youtu.be/gXxPkR-5pus