On February 6, 2019, as companies around the United States busy themselves for the annual ritual of parsing their D&O questionnaires, finalizing their proxy statements and submitting them to the board for approval, the Securities and Exchange Commission released two identical new Compliance and Disclosure Interpretations regarding disclosure, principally in proxy statements, relating to director backgrounds and diversity policies used by nominating committees in evaluating director candidates.
Item 401(e) of Regulation S-K requires companies to discuss the background of their directors, including their business experience, qualifications, attributes and skills that led to their nomination as a director. In addition, Item 407(c)(2)(vi) of Regulation S-K requires a company to discuss the nominating committee’s process for identifying and evaluating director nominees, including a discussion regarding any director diversity policy and the manner in which its effectiveness is assessed.
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