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Last week, the Securities and Exchange Commission (SEC) Office of Minority and Women Inclusion (OMWI) introduced its voluntary Diversity Assessment Report for Entities Regulated by the SEC. The Report is intended to help SEC-regulated entities conduct self-assessments of their diversity policies and practices, and provides these entities with a template for submitting information about their self-assessments to OMWI. Conducting self-assessments and providing the information to OMWI are voluntary.

The SEC’s Report is in line with the recent demands from US shareholders demanding transparency and accountability when it comes to gender pay and commitments to creating more inclusive and diverse workplaces. We expect diversity and inclusion to remain at the forefront of legal issues facing employers for years to come.

Reported Information

What follows is an example of some of the information requested in the Report:

About the Company

  • Whether the company has a written diversity and inclusion (D&I) policy
  • Whether the D&I policy is approved and support by the CEO and other senior leaders
  • Whether the company takes proactive steps to promote a diverse pool of candidates when selecting members of the board of directors or other governing body
  • Whether the company communicates employment opportunities through media predominately serving minorities and women
  • Whether the company includes D&I objectives in performance plans of its managers
  • Whether the company publishes information about it D&I efforts on its web site
  • The company’s demographic composition as reported on the most recent EEO-1 Report

About the Company’s Suppliers

  • Whether the company has a supplier diversity policy
  • Whether the company maintains a list of qualified minority-owned and women-owned businesses that may compete for upcoming contracting opportunities
  • Whether the percentage of contract dollars awarded to minority-owned and women-owned businesses by gender, race, and ethnicity
  • The company’s supplier diversity by percentage of contracting dollars

Use of the Information by the SEC

The SEC may use the information to:

  • To ascertain which policies and practices reflected in the Joint Standards have been adopted by SEC-regulated entities
  • To highlight diversity policies and practices that have been successful
  • Publish information collected from Diversity Assessment Reports in the OMWI Annual Report to Congress*

* The SEC will not publish any information that identifies a particular regulated entity or discloses confidential business information.

Before You Accept the SEC’s Invitation

Today’s employers are subject to increasingly aggressive legal and regulatory developments in the D&I space that place new patchwork demands on employer practices, policies, compliance and reporting requirements. As such, we recommend working with counsel to develop a coordinated and comprehensive global strategy before sharing bits of information piecemeal. A careful plan of attack requires multiple company stakeholders (recruiting, HR, legal, the C-Suite, the communications team, etc.) best directed through a single point of legal counsel.

Counsel can help you carefully consider if, what and where the company might self-disclose information relating to diversity and inclusion in light of key considerations such as, data privacy, legal privilege, legal liability and risk exposure, taking into account the company’s geographic footprint.

Link to the SEC’s FAQs HERE

For more information, please contact your Baker McKenzie lawyer.