Time to enhance your disclosure controls for diversity data
– Disclosure controls need to be enhanced for all the new ESG data being disclosed.
Matt Kelly wrote this nice blog on his “Radical Compliance” site, reviewing what companies have disclosed about diversity in their SEC filings over the past year. One big issue that companies will have to grapple with is the accuracy of their disclosures. Matt touches on that in this excerpt:
As much as I applaud the disclosure of diversity data, one thought does come to mind: if companies start including EEO-1 data in their SEC filings, that can raise questions about disclosure controls. Who’s in charge of gathering EEO-1 data? How is that data captured, so you can assure the completeness and accuracy of information disclosed in the 10-K?
In fact, audit and compliance professionals might want to review their diversity disclosure processes now, because I suspect that sooner or later the Biden Administration will require more formal, expansive disclosure of D&I efforts. This could be a good opportunity for a trial run of your data capture and disclosure processes, in case the SEC adopts a more substantial disclosure requirement down the road.