The agency has issued guidance for companies to disclose pandemic-related risks and worker protection programs, but some investors say the move is insufficient.
  • Activist investors say the Securities and Exchange Commission’s latest guidance directing companies to disclose COVID-19 related risks and employee protection plans is inadequate. 
  • Oxfam America and others say companies should be required to provide stakeholders with information about matters including worker safety and how operations are impacted by the pandemic. 
  • Investors are concerned about reports of companies asking employees to sign waivers that relieve businesses of liability if workers get sick.

Activist investors plan to continue pushing the Securities and Exchange Commission for stronger disclosure requirements from public companies about COVID-19-related business risks and worker protection programs.

“No workers should have to choose between their job and their life.” Robbie Silverman, the private sector advocacy manager at Oxfam America, told Karma in an email interview. “Rather than forcing workers to sign waivers absolving their employers of any COVID-related risks, companies should invest in measures that actually protect their workers’ health and safety.”

Oxfam is one of 98 stakeholders, including labor unions and asset managers, that signed a letter in mid-June urging the SEC to take stronger action on the matter. Signatories say the SEC guidance addressed some issues, but investors are still alarmed by reports of companies that are providing inadequate protection for workers.

The SEC has made two announcements — one in March and the latest one in June — where the agency suggested companies disclose information about how they are impacted by the pandemic and lockdowns, which have hurt economic growth worldwide and caused many U.S. businesses to tap into emergency government relief funds to stay afloat.

In the note, the agency also urged companies to address investor concerns about how workers will be protected amid the outbreak, asking companies to disclose “to what extent have you altered your operations, such as implementing health and safety policies for employees, contractors, and customers, to deal with these challenges, including challenges related to employees returning to the workplace?” 

Activists say a recommendation is not enough.

“The COVID-19 pandemic has exposed a wide range of risks faced by businesses that are financially material to investors, including, but not limited to, employee health and safety, access to paid leave, access to health care, supply chain management, worker engagement, political lobbying, and executive compensation,“ Silverman said. “Unfortunately, the existing SEC guidance is not sufficient to ensure that investors have access to material information to properly assess whether companies are adequately confronting the risks.”

The business community has been lobbying Congress and the White House for legislation that would shield companies from lawsuits brought by employees and customers who may contract COVID-19 from their establishments. Some businesses are asking employees to sign waivers that relieve them of liability if returning workers or customers get sick.

“You’ve got to give the businesses some confidence here that if something happens, and it may not be their fault — the disease is an infectious disease — if something happens, you can’t take them out of business,” White House economic advisor Larry Kudlow told CNBC.

Until the issue is settled, companies will have to consider the risk of liability along with numerous other factors before deciding to reopen.

Numerous activist groups want those considerations to be disclosed and plan further action if companies do not discuss them adequately when reporting their second-quarter results.

“The SEC must act to require companies to provide consistent, reliable data to investors about the economic impact of the pandemic on their business, human capital management practices, and supply chain risks,” wrote numerous groups under the banner Our Financial Security.