IWBI’s Jason Hartke Sits Down with U.S. Rep. Cindy Axne

At the International WELL Building Institute (IWBI), we have been working closely with companies and stakeholders who understand that human health impacts corporate performance indicators - including productivity, engagement and resilience. In the past year and a half, we’ve seen how these elements have played such a critical role in the face of the COVID-19 crisis and beyond. Notably, many in the investment community are doing more to incorporate this data and non-traditional financial indicators, like ESG (Environmental, Social and Governance) factors, into their analyses to gain a deeper understanding of a company’s source of risk and return. As a result, human health (and human capital management) is gaining recognition as material to a business’ bottom line.

In the past few years, even before the pandemic, we’ve also seen federal lawmakers step into this space, looking for policy opportunities to drive financial structures to appropriately value and recognize human capital. One of the most prominent national leaders has been U.S. Rep. Cindy Axne (D-IA), who has led on important legislation seeking to address how companies disclose and report on these key human capital factors.

IWBI’s Jason Hartke had the chance to sit down with Rep. Axne recently and talk more about her leading role to advance her bill, the Workforce Investment Disclosure Act.

Q: First off, I’d like to commend you for your leadership in introducing the Workforce Investment Disclosure Act. For those just learning about the bill, tell us a little more about how the bill came about and what it’s intended to do?

This bill really came out of a desire to make sure that we understand and value companies that really are investing in their workers, and understand the importance of doing that for their long-term growth. We all know that companies with workers that are more productive and more engaged are going to do better, and practically every business I hear from says their people are their biggest asset. However, we don’t have consistent information to know which companies are taking that to heart, and which ones are ignoring it and treating workers as replaceable.

My bill would require disclosure from public companies to get more information about how they’re investing in their workers. That includes basic things — like how many employees are part time, or how they use contractors or outsourcing, along with information about workforce turnover or promotion rates. If workers aren’t sticking around, or have no pathway to grow inside the organization, that tells us something about how the company is operating. We’re also going to get more data about health and safety, about things like paid leave and benefits the company offers, and about how they pay their workers. And we’re going to get real disclosure of how much companies are investing in workforce development and skills training.

My background before coming to Congress was working in strategic planning and organizational development, so I’ve spent my whole career working with companies and organizations that are planning and developing their workforce so they can grow and be successful long term. I know from firsthand experience how companies can do better there, and the work and metrics that are required to do so. This is information that companies already look at – and the best companies are the ones who are looking at and focusing on it the most.

Q: And where does the bill stand at this point?

We actually just passed this bill out of the House of Representatives on June 16th. I first started working on this issue shortly after getting to Congress in 2019, and introduced the bill with Senator Warner in February 2020. I was able to get that passed out of the House Financial Services Committee last year, but with everything we were working on with COVID after that, we didn’t manage to get it any farther. So we kept working on the bill, and re-introduced it with some updates in May. Then, we managed to pass that bill out of the House along with a set of corporate governance and SEC disclosure reforms.

For our next steps, we’re looking at two paths: first, the Senate, where hopefully we can get the Senate Banking Committee to work on this, and second, the SEC. The current and most recent SEC Chairs, Jay Clayton and Gary Gensler – one from each party – have both talked about the need for more information about how companies are thinking about and investing in their workforce. And I’m optimistic, since Chair Gensler has said the SEC is going to be proposing rules on this disclosure. I’ll be working with them to see what that looks like, and hope we can see some movement soon to get this information about how companies are investing in workers.

Q: As we recover as a nation from the devastating impacts of COVID-19, what do you see as the most urgent opportunities and gaps for companies and workplaces to address?

I think one of the biggest things we saw over this past year was how important it is for companies to keep their workers safe and healthy. That includes things like making sure they offer paid leave, so that people don’t have to come in sick, or the steps they take to make sure that the environment their people – their most important asset – work in is going to keep their workers healthy. That includes the work they put in on social distancing, providing masks and PPE, and larger investments like better ventilation.

When I look at estimates that employers can save $6 in lower medical costs and less missed time for every $1 invested in disease prevention and workplace health programs, that really illustrates just how critical it is for companies to invest in that - and for us to get the information about how companies are investing in keeping their workers healthy.

Q: Again, studies have shown that companies doing more to support employee health and well-being policies help mitigate risk and improve performance. What impact do you expect from this bill and how do you see it reshaping how companies adopt these types of policies at scale?

I think we’re certainly hoping that this kind of bill can help make sure companies really focus on their workers. I know companies, especially after the last year, are already doing more thinking about how to keep their workers healthy and successful, but the goal is now to make sure that companies, investors, and the public all really understand the benefits of that investment. Investors are already thinking about it – and it’s obvious to everyone that having a workforce that’s healthy is better for everyone involved.

That goes beyond just physical health, too: over a 25-year period, Fortune’s “100 best companies to work for” outperformed their competitors by an average of more than 2% per year. That shows there’s something real and valuable there that those companies understood and focused on: their workers. We need to change the thinking about these things from where workers are solely a cost – which is how they currently show up on the balance sheet – and really make the disclosures we get from companies match what we all know: that people are their biggest asset.

Thank you again Representative Axne for joining us. We appreciate your time and the opportunity to discuss your work and this important bill.

Jason Hartke is the Executive Vice President of Advocacy and Policy at the International WELL Building Institute.