DISCLOSURE GUIDANCE FROM OTHER AUTHORITIES
The Conference Board. “The Conference Board is a global, independent business membership and research association . . . [seeking to] provide the world’s leading organizations with the practical knowledge they need to improve their performance and better serve society.” The website has resources on many disclosure-related (and other) topics, some of which are complimentary. Some highlights:
The Conference Board, “Recommendations of the Task Force on Corporate/Investor Engagement” (2014)
The Conference Board Governance Center White Paper, “What is the Optimal Balance in the Relative Roles of Management, Directors, and Investors in the Governance of Public Corporations?” (2014)
TheCorporateCounsel.net Blog: This blog’s authors often highlight specific aspects of public company filings—both the good and the not so good. They also comment on SEC initiatives to enhance disclosure (among other things). Many features of TheCorporateCounsel.net are for members (subscribers) only, but this blog is available to anyone and is worth reading regularly.
The Council of Institutional Investors calls itself “the voice of corporate governance.” Their website offers resources on issues including executive compensation and board accountability. Some highlights:
“Board Evaluation Disclosure” (January 2019)
“Best Disclosure: Company-Shareholder Engagement” (December 2015)
“Best Disclosure: Board Evaluation” (September 2014)
“Best Disclosure: Director Qualifications & Skills” (February 2014)
The National Investor Relations Institute offers some free resources here.
“What investors expect from the 2020 proxy season” (February 2020), by the EY Americas Center for Board Matters. This report summarizes the current views of governance experts at more than 60 institutional investors.
Guide to Effective Proxies (11th edition), by DFin. If you want to see lots of different styles (and levels of disclosure) for each section of the proxy, this is the place.
2022 Proxy Design Library, by Broadridge. If the DFin 318-page guide intimidates you, start here!
Cybersecurity Disclosure Benchmarking (September 2018), by the EY Center for Board Matters. This survey summarizes the cyber-related disclosures of the Fortune 100.
“Best Practices” in Board Matrices (August 2018), by the New York City Comptroller. Scott Stringer encouraged companies held by the New York City Pension Funds to improve Board diversity and disclosure about Board composition. This report showcases some of the responses.
Corporate Governance and Executive Compensation Survey 2018, by Shearman & Sterling. A review of the 100 largest U.S. public companies containing some advice and some benchmarking. Interesting stuff.
Argyle compiles disclosure examples and often adds useful commentary:
Key Proxy Statement Disclosure Trends (with King & Spalding, from 2019 proxies)
A Benchmark of Messages From Leadership in Proxy Statements (from 2018 and 2019 proxies)
Institutional Investor Survey 2017, by Morrow Sodali [free registration required to access the report]. Subtitled “corporate governance is no longer just about the annual meeting,” the survey addresses issues like executive compensation, board diversity, and the importance of ESG disclosure.
Disclosure Readability and the Sensitivity of Investors’ Valuation Judgments to Outside Information (August 2016): results of a study by H. Scott Asay (University of Iowa), W. Brooke Elliott (University of Illinois), and Kristina M. Rennekamp (Cornell) finding that “investors’ valuation judgments may be more influenced by outside sources of information when managers provide less readable firm disclosures” because investors aren’t comfortable basing their decisions on the information the company has provided.
It Pays to Write Well (July 2016): results of a study by Byoung-Hyoun Hwang (Cornell University and Korea University) and Hugh Hoikwang Kim (University of South Carolina) finding that investment companies with hard-to-read disclosure documents “trade at significant discounts relative to the value of their fundamentals.”
The Corporate Risk Factor Disclosure Landscape (January 2016), by the Investor Responsibility Research Center Institute and EY, finding, among other things, that risk factor disclosures “often are generic and do not provide clear, concise and insightful information.”
Disclosure effectiveness in action: companies make great strides, by The Financial Executives Research Foundation and EY (2016).
Do Disclosures of Performance Metrics Matter for SoP Voting? by Tathagat Mukhopadhyay (University of Colorado at Boulder) and Lakshmanan Shivakumar (London Business School) (June 2019).
Shorter version, in blog form here. Bottom line: “our analyses suggest that the quality of compensation-related disclosures affects voting outcomes.”
Disclosure effectiveness: Companies embrace the call to action, by The Financial Executives Research Foundation and EY (2015).
Compensation Discussion and Analysis Template, second edition (April 2015), by the CFA Institute.
2015 Investor Survey: Deconstructing Proxy Statements–What Matters to Investors, by RR Donnelley, Equilar, and the Rock Center for Corporate Governance at Stanford University, finding, among other things, that “proxies are too long and difficult to read.”
2015 Innovations in CD&A Design: A Proxy Disclosure Analysis, by Equilar, with commentary by RR Donnelley.
2018 Audit Committee Transparency Barometer, by the Center for Audit Quality.
International Integrated Reporting Council. The IIRC “is a global coalition of regulators, investors, companies, standard setters, the accounting profession and NGOs.” One goal is to blend ESG reporting with traditional financial reporting.
The International Integrated Reporting Framework (December 2013).
Richard A. Cazier (University of Texas at El Paso), Jeff L. McMullin (Indiana University), and John Treu (University of West Virginia), Are Lengthy and Boilerplate Risk Factor Disclosures Inadequate? An Examination of Judicial and Regulatory Assessments of Risk Factor Language (November 2018). This one depresses me. The researchers found that, even though companies that use long and boilerplate risk factors tend to have problems like higher cost of capital and greater stock price volatility, that type of disclosure persists because it may be viewed more favorably by regulators and judges.
Cory A. Cassell (University of Arkansas), Lauren M. Cunningham (University of Tennessee), and Ling Lei Lisic (George Mason University), The Consequences of Writing Not So Readable Responses to SEC Comment Letters (April 1, 2015). This interesting study found that issuers that prepared well-written (clear, easily understood) responses to SEC comment letters had shorter comment/review periods.
Alex Edmans (Wharton), Mirko Heinle (Wharton), and Chong Huang (UC Irvine), “Optimal Disclosure When Some Information is Soft” (December 12, 2013). “Government intervention to cap disclosure can create value, in contrast to common calls to increase disclosure.”
Ernst & Young, “Audit committee reporting to shareholders: going beyond the minimum” (February 2013).
Board of Governors of the Federal Reserve System, “Designing Disclosures to Inform Consumer Financial Decisionmaking: Lessons Learned from Consumer Testing” (August 2011).
Tim Loughran and Bill McDonald, Mendoza College of Business, University of Notre Dame, “Measuring Readability in Financial Text” (May 10, 2010). “We find significant relations between improved 10-K readability and increased small investor trading, the likelihood of seasoned equity issuance, and better corporate governance.”
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