Since 2015, pay gap disclosure has been front and center on the activist shareholder proposal landscape from an employment and workforce perspective. Following closely on the heels of tragic events of last summer and the significant advancement of the Black Lives Matter movement, activist shareholder groups have pivoted away from proposals requiring disclosures of pay gap statistics and are instead focused on other dimensions of internal diversity, equity, and inclusion (“DEI”). These initiatives seek more broad-based disclosure of whether and how companies are managing gender and racial disparities in representation – including, for example, in the boardroom and at senior management levels within an organization. Combined with recent rule changes at the U.S. Securities and Exchange Commission (“SEC”) with respect to required Human Capital Management disclosures, public companies should prepare for how they will respond to proposals seeking different and new disclosures regarding steps they are taking to expand and maintain diversity within their workforces.
Activist Shareholder Proposals and HCM Disclosures Pivot to Diversity, Equity, and Inclusion in 2021
