The New Age of Transparency in Human Capital: What the SEC Rule and ISO Standard Mean for Public Reporting

Abstract

On August 26, 2020, the United States Securities and Exchange Commission (SEC) published the final rule updating requirements for public reporting by companies subject to SEC regulation. For the first time, companies are now required to disclose material information regarding their human capital, particularly with regard to attraction, development, and retention of employees. While the SEC does not provide a list of metrics that must be disclosed by all organizations, the International Organization for Standardization (ISO) published a standard in December 2018 calling for voluntary disclosure of ten metrics for all organizations and an additional 13 for large organizations. These two initiatives should usher in a new era of transparency in human capital reporting, which will eventually extend to all types of organizations, not just those subject to SEC requirements.