SEC Nudges Cos. Toward More Robust Diversity Disclosures

Ryan Wilkins, chair of Stradling’s Corporate and Securities department and leader of the firm’s Public Company practice group, was quoted in an article published by Law360 on February 15th, “SEC Nudges Cos. Toward More Robust Diversity Disclosures.” The SEC recently updated disclosure guidelines that call upon companies to explain how certain “self-identified diversity characteristics” of directors influence nomination decisions. Although overall lawyers said the new guidelines won’t make a huge splash, the shift towards more disclosure coincides with other changes in legislations that require corporations to appoint more women to boards or require them to report more details about how they compose their bodies. Wilkins stated that “this is part of a broader conversation about board diversity” and that “we see a lot of momentum toward companies thinking about these things.” He also noted that SEC rules have been criticized as vague in their lack of defining what diversity means and as a result, “there isn’t much agreement by companies on how much diversity matters should be described in disclosure documents, if at all.” Wilkins believes that whether it comes from the SEC, Congress, institutional investors, shareholder groups or socially minded activists, there is “momentum toward more disclosure and greater diversity in the boardroom.” Read the full article here.