SEC Provides Guidance on Director Diversity Disclosure: New Compliance and Disclosure Interpretations Encourage Companies to Disclose How Self-Identified Diversity Characteristics of Directors Factor Into Nomination Decisions

Sullivan & Cromwell LLP - February 11, 2019

On February 6, 2019, the Securities and Exchange Commission’s Division of Corporation Finance released Compliance and Disclosure Interpretations 116.11 and 133.13, which address the disclosure of self-identified diversity characteristics with respect to board members and nominees under Items 401 and 407 of Regulation S-K. The C&DIs provide that to the extent a reporting company’s board nominating committee considers self-identified diversity characteristics (e.g., race, gender, ethnicity, religion, nationality, disability, sexual orientation or cultural background), the SEC would expect the company’s disclosure to include identifying those characteristics and how they were considered.