On February 6, the staff of the Division of Corporation Finance of the Securities and Exchange Commission released two identical Compliance and Disclosure Interpretations (C&DIs). These C&DIs provide guidance on disclosure required under Items 401 and 407 of Regulation S-K in circumstances where a director or board nominee self-identifies specific diversity characteristics, such as race, gender, ethnicity, religion, nationality, disability, sexual orientation or cultural background. Item 401(e) requires that companies disclose the “specific experience, qualifications, attributes or skills that led to the conclusion that the person should serve as a director.” Item 407 requires that companies describe how its board (or nominating committee) implements policies that it follows, if any, with regard to the consideration of diversity in identifying director nominees.

In C&DIs 116.11 and 133.13, the staff stated that, to the extent the board or nominating committee considered any such self-identified diversity characteristics of a director in its evaluation of the specific qualifications and attributes applicable to the director’s service on the board, they would expect the company to identify those characteristics in its Item 401 disclosure and describe how they were considered. They also indicated that they expect that any description of diversity policies followed by the company, as required by Item 407, would include a discussion of how the company considers the self-identified diversity attributes of nominees.

The full text of the staff’s new C&DIs are available here and here