Sepedeh "Sepi" Tofigh is a Associate in our Miami office
SEC Chairman Mary Jo White spoke at length on "information overload" in her October 15, 2013, speech at the National Association of Corporate Directors Leadership Conference. After discussing the benefits and general types of public company disclosures required by Regulation S-K, Ms. White questioned currently required disclosures and whether information being disclosed had grown too lengthy to be of any value to shareholders and investors.
Ms. White spoke about greater availability of public company information available on the Internet and potentially limiting the necessity of some currently required disclosures. She addressed disclosure overload, stating that public filings are often internally repetitive. For example, a legal proceeding or investigation is discussed as a separate item in a yearly or quarterly public company filing (Form 10-K or 10-Q) and is often addressed again in the risk factors, in the notes to the financial statements, and the management's discussion and analysis. She went on to discuss the success of recently reformed executive compensation disclosures, with the caveat that disclosures in some cases can amount to more than 40 detailed pages. These details are due not only to the disclosure requirements, but also to companies trying to do a better job of explaining the rationale for the compensation packages they pay executives because they now must provide investors with an advisory vote on executive compensation.
Finally, Ms. White addressed shareholder access to public company filings and the SEC's opportunity to improve investor access to information by considering additional or varying methods for information access and delivery on its Electronic Data-Gathering, Analysis and Retrieval (EDGAR) database. She discussed a potential "core document" or "company profile" that would be a predominantly static document updated only with respect to significant events, financial statements and securities offerings. Ms. White concluded that the SEC's continuing study of Regulation S-K is only a part of the efforts undertaken in moving forward on disclosure review and reform.
SEC Speech:
http://www.sec.gov/News/Speech/Detail/Speech/1370539878806#.Ul2VExAX-8B
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