True, many advocacy organizations recommend frameworks and standards, and pressure boards to get companies to follow them. But outside of traditional accounting rules and general disclosure standards, none of these are required by U.S. law, the road to such legal requirements is long, and managers need not be first movers in the process of adapting.

On environmental disclosures, private standard setters have been working since at least 1998 with the launch of the Greenhouse Gas Protocol initiative. The Securities and Exchange Commission (SEC) incorporated environmental information into its general disclosure model in 2010, and then in 2022 proposed a more specific protocol. While the SEC is expected to release final regulations within a quarter, it’s difficult to predict the details.

For one, the SEC received abundant public comment on its proposal that will almost certainly yield material changes in the final version. If such comments are not heeded, the likelihood increases that a federal court will enjoin enactment of the regulation in whole or in part.

The details most likely to survive, moreover, are those many companies already comply with voluntarily, particularly those produced by the Greenhouse Gas Protocol or the Task Force on Climate-Related Financial Disclosures (TCFD). The SEC opined, and many commentators agreed, that these existing and widely-used standards provide a reliable baseline for environmental disclosure. Until final regulations appear, it would be rational for company executives to continue their existing voluntary programs, and prudent for boards not to pressure them to guess what the new regulations will entail.

On human capital management, the SEC in 2020 incorporated this novel concept into its general disclosure model. While it has signaled interest in more specific disclosure rulemaking in this area, the road to any final regulations is at least as bumpy as with its climate proposal. After all, international standard setting in this area—an important premise of the SEC’s proposed emissions regulations—is just beginning. Concepts of human capital have extremely different meanings and uses in different countries—starting with the new conception of employees as “assets” and reaching into the specific details about determining what is fair pay or parity; employee benefits, training and working conditions; diversity; and inclusion.

While international standards on emissions must overcome national differences too, the sense and talk of climate change as an urgent global matter helps forge consensus. The same cannot be expected for international standards on human capital. Progress will have to contend with the same forces that for decades stalled the adoption of international financial reporting standards (IFRS)—national differences in accounting traditions, government forms, economic systems, labor markets, legal regimes, corporate governance arrangements and conceptions of corporate purpose.

To win consensus, such diverse national forces always influence the shape of international standards. In the case of IFRS, the result is principles-based standards, high quality yet at a level of generality sufficient to command widespread assent. And that leaves enough wiggle room at the national level that even today, application of the identical standard can lead to different results. And, not incidentally, the U.S. still has never adopted IFRS and probably never will, reflecting a belief that its national profile—with distinctive conceptions of democracy, federalism, capitalism, worker protection, shareholder primacy and so forth—is unique.

Board advisors are certainly right to flag forthcoming topics for board consideration and boards are wise to stay informed about how the horizon may be shaping up. But boards are entitled to keep the advice in perspective and remain flexible in discussing these topics with company management. While boards should certainly be prepared, even help their companies look around corners, it may also be in the best interests of their companies to avoid putting managers in the posture of “hurry up and wait.”