As with most keynote leadership presentations, the discussion was more strategic in nature, posing ideas and more questions regarding the future of disclosure. The title of her speech was The Path Forward on Disclosure.
For tactical practitioners of investor relations and corporate compliance, here are some salient points aka “what’s on Ms. White’s mind:”
- She acknowledged our “Better safe than sorry” environment and this has contributed to disclosure overload. To this, she spoke on the 1976 US Supreme Court ruling that a fact is not material if an investor might find it important… but rather if there is a substantial likelihood that a reasonable shareholder would consider it important. What is material has ALWAYS been a grey point.
- Are there specific disclosures investors don’t even want that contributes to disclosure overload? The JOBS Act gives the SEC the opportunity to assess which changes in disclosure requirements should be made for emerging growth corps – modernized and simplified to reduce the costs and practical burdens.
- Is there is a way to avoid repetition in disclosures which often results from one set of documents overlapping with another set of requirements?
Access to disclosures
- Are investors getting the information they need when they need it AND can their access to a company’s disclosures could be improved… ie: the skyrocketing growth of reliance on the instantaneous access that smart devices and social media technologies deliver.
- Do these smart devices need their own SEC disclosure guidance? She cautioned that shorter timeframes could impose an undue burden on companies and whether requiring more frequent updates could lead to a decrease in the quality of the information.
- One interesting idea raised was that the SEC could explore a new EDGAR filing framework based on the nature and frequency of the disclosure: having a core document with base information that changes infrequently and then subsequent filings (offerings, financial statements and one-off significant events) are “updates.”
- No mention of XBRL.
Regardless what the future strategic direction is, she was crystal clear on one tactical point: the SEC will always use its position to require companies to provide investors with the information they need to make informed investment and voting decisions.
Read Mary Jo White’s transcript here.
Have a great day.