Friday, January 26, 2018

SEC issues diversity assessment report, invites companies to voluntarily submit self-assessments

By R. Jason Howard, J.D.

The SEC’s Office of Minority and Women Inclusion, created under Section 342 of the Dodd-Frank Act and responsible for all matters relating to diversity in management, employment, and business activities, has invited SEC regulated entities to voluntarily submit self-assessments on its diversity policies and practices.

Diversity assessment report. The OMWI created the diversity assessment report to: (1) help guide a regulated entity’s self-assessment of its diversity policies and practices using the Joint Standards; and (2) provide the regulated entity with a template for submitting diversity assessment information to the OMWI Director at the SEC, as contemplated under the Joint Standards.

Joint standards. The Joint Standards were issued by the SEC and five other Federal financial regulatory agencies in June 2015, and “reflect leading policies and practices for advancing workforce and supplier diversity, are intended to be applied in a manner appropriate to the regulated entity’s unique characteristics, such as workforce size, governance structure, total assets, and geographic location,” but some of the standards may not be applicable to every regulated entity.

Standards for assessing diversity policies. The frequently asked questions section of the standards lists the entities covered by the Policy Statement as well as covering questions about how the Policy Statement defines diversity.

The Director of OMWI, Pamela Gibbs said, “This is an important step in our efforts to understand the diversity and inclusion efforts of our regulated entities, as well as promote transparency and awareness in this area.”

The Joint Standards are meant to address the U.S. operations of a regulated entity and their use is voluntary, as are the self-assessments of diversity policies and practices and any submissions of diversity assessment information to the SEC.