D&I Disclosure: Consider “Materiality”

We had a lot of fun during this 36-minute Vid-Guide entitled “Yes, Diversity & Inclusion Disclosure” with Skadden Arps’ Brian Breheny, Uber’s Keir Gumbs, Vinson & Elkins’ Sarah Fortt and Mayer Brown’s Candace Jackson. We tackled a range of “D&I” disclosure topics but got to the heart of the matter in the waning minutes – starting at the 29:22 mark – when there was a healthy group discussion regarding “materiality.”

Be mindful to give investors what they want – which is a whole lot of D&I data points, as well as a full description of the company’s D&I strategy and story. But at the same time, be mindful to be accurate, be consistent – don’t cherry-pick data points only when those look favorable for the company. Otherwise, you might find yourself in the position where you’re getting sued for misleading disclosure – as some companies have already found themselves.

Among the many finer points made was Sarah’s beautiful illustration of this dilemma, consider a “layered” approach to materiality that distinguishes between “Little M” materiality (what is important to your company’s specific investors) – and “Big M” materiality (what is important to a “reasonable investor,” the threshold for liability under the federal securities laws).