ESG Strategies and Questions Every Independent Board Member Should Know

Calls for corporate transparencyⁱ have increased dramatically in recent yearsⁱⁱ. In part, this is driven by shareholder and employee interest in accountability for progress made toward diversity, equity, inclusion, and accessibility (DEIA) pledges. In response, employers have opted to convey their progress in various ways, creating inconsistent disclosures that do not allow for easy comparison across peer companies.

Although there is currently a lack of a one-size-fits-all approach for disclosing workforce diversity demographics and objectives, there is evolving rulemaking to remedy it. For example, as of August 6, 2022, Nasdaq-listed companies are to voluntarily disclose board-level diversity in proxy statements or in information statements for shareholders. Additionally, a final decision is expected by the Securities and Exchange Commission on proposed amendments to Form N-PX, published on October 1, 2021. These amendments will strengthen and standardize reporting on environmental, social, and governance-oriented matters including human capital disclosures by enhancing the information investment companies report on their proxy votes.