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GM, Chevron Knock SEC’s Human Capital Disclosure Plan

Oct. 25, 2019, 9:30 AM

An SEC proposal to enhance disclosures on company workforces isn’t sitting particularly well with GM and Chevron.

The corporate giants have raised concerns with the Securities and Exchange Commission over its plan to change some of how public companies report non-financial information, including human capital details. The August proposal stems from the Disclosure Effectiveness Initiative former SEC Chairman Mary Jo White began during the Obama administration to improve Regulation S-K and other corporate reporting requirements.

The plan would direct companies to disclose “human capital measures or objectives that management focuses on in managing the business.” Companies only need to report how many workers they have now.

The proposed disclosures would be superfluous and burdensome to produce, without a corresponding benefit to investors, according to General Motors Co. and Chevron Corp. The companies sent the commission letters about their unease as part of a comment period that ended Oct. 22.

The possible new reporting “would not further the goals of the Proposed Rule, which are ‘to improve these disclosures for investors, and to simplify compliance efforts for registrants,’” GM said. Christopher Hatto, controller and chief accounting officer, and Rick Hansen, assistant general counsel and corporate secretary, signed the company’s letter.

Already Reporting

Chevron and GM said they and other companies already disclose workforce information in voluntary reports on their websites or in SEC filings when it’s deemed material.

GM puts details about employee benefits, wellness, and engagement in its annual sustainability report, according to the automaker. Chevron also voluntarily releases information about diversity, workforce development, and health and safety, among other topics, the company said.

“Chevron agrees that effective human capital management and investment in our workforce is important to ongoing business success,” David Inchausti, Chevron vice president and comptroller, said in the company’s letter. “We also appreciate that an understanding of a company’s human capital management, as suggested in the Proposing Release, is important to stakeholders.”

Investor Advocate Concerns

Some investor advocates weren’t satisfied with the SEC’s proposal either, but for different reasons.

The California Public Employees’ Retirement System and AFL-CIO urged the commission to add more human capital reporting obligations than what it proposed, such as requiring disclosures on employee diversity.

“By expanding the discussion on human capital, we note that the Commission has recognized the value of human capital,” CalPERS CEO Marcie Frost said in the organization’s letter. “While we would like to see this new focus result in additional transparency, we do not believe that the Commission’s current approach will provide sufficient comparable disclosure to aid investors.”

A representative for SEC Chairman Jay Clayton didn’t immediately respond to a request for comment.

The agency hasn’t announced when it might vote to adopt its proposal.

To contact the reporter on this story: Andrew Ramonas in Washington at

To contact the editors responsible for this story: Michael Ferullo at; Seth Stern at