How companies are leveraging their disclosure committees to meet evolving disclosure requirements – new research from EY, Society for Corporate Governance and FEI
The results highlight current practices and trends regarding the structure, composition and activities of disclosure committees.
MORRISTOWN, New Jersey, November 10, 2021 / PRNewswire-PRWeb / – New study reveals how U.S. public companies have leveraged disclosure committees to meet evolving disclosure requirements.
This new report, Disclosure Committee Report: Practices and Trends, was released today and jointly completed by Ernst & Young LLP (EY), the Society for Corporate Governance (Society) and the Financial Education & Research Foundation (FERF) – the independent, not-for-profit research arm of Financial Executives International.
This is an update to the 2014 report, Unlocking the Potential of Disclosure Committees: Leading Practices and Trends, and provides current information on evolving practices in this crucial area of disclosure controls.
The 2014 report, which has remained a leading benchmark on disclosure committees, discusses their purpose, composition and operations, and illustrates how they can facilitate compliance with regulatory requirements while mitigating risk and delivering real value. investors, stakeholders, management and boards of directors of public companies. .
“We originally published our take on disclosure committees seven years ago. We felt it was time to revisit the analysis to see if the themes have changed and where new areas of value may have come to light. We have seen significant progress for the better. Disclosure committees evolve in terms of accountability, tackle additional areas, and deliver valuable business impact as companies get smarter about how to build and operate them, ”said Andrej Suskavcevic, CAE, President and CEO of Financial Executives International and FERF.
The results highlight current practices and trends regarding the structure, composition and activities of disclosure committees. The report provides insight into how companies have leveraged their committees to meet rapidly evolving disclosure requirements and expectations and facilitate more effective disclosures.
“As our survey shows, members of disclosure committees have key roles in a range of critical business functions. Disclosure committees not only review SEC reports and filings, but other types as well. communications and corporate disclosures that are considered important parts of an overall business history and value proposition These include annual letters to shareholders, information on corporate websites ‘company and investor presentations, as well as cybersecurity, climate and sustainability information wherever it appears, ”said Randi Morrison, Senior Vice President – Communications, Member Engagement and General Counsel, Society for Corporate Governance.
“Disclosure committees can facilitate effective public company disclosures, build the confidence of the CEO and CFO in performing their quarterly SOX certifications, and help the audit committee and board of directors oversee financial reporting.” and other important public disclosures, ”said Rani Doyle, Managing Director, Ernst & Young LLP, Center for Board Matters.
The report is the result of a survey of the members of the Society, mainly company secretaries, internal legal advisers and other internal governance professionals, and members of the FEI, who are professionals and finance executives. Respondents represented companies of different sizes and from multiple industries.
Formal disclosure committees are a corporate standard, with almost all respondents indicating that they have one in place.
Committee staffing is fairly uniform, with members generally appointed by senior management.
Written protocols of disclosure committees, such as charters, reports and minutes, have become more common.
The roles of the members are diverse, covering, on average, more than 10 different professional functions.
Most disclosure committees meet at least quarterly and about 60% keep formal minutes.
About a third of the disclosure committees regularly report to the audit committees.
Disclosure committees can have sub-committees and multi-level structures.
While disclosure committees continue to focus primarily on SEC financial reports and related disclosures, many of them also review other types of documents, such as proxy statements, sustainability reports, and website content.
The report, Disclosure Committee Report: Practices and Trends, is available at http://www.financialexecutives.org/Research and http://www.societycorpgov.org.
EY is a global leader in assurance, tax, transaction and advisory services. The knowledge and quality services we provide help build confidence in capital markets and economies around the world. We develop exceptional leaders who team up to deliver on our promises to all of our stakeholders. In doing so, we play a vital role in building a better working world for our employees, customers and communities. EY refers to the global organization and may refer to one or more of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.
Financial Executives International (FEI) is the leading advocate for corporate financial management perspectives. Its more than 10,000 members hold policy-making positions as chief financial officers, treasurers and controllers in companies across all major industries. FEI enhances the professional development of its members through peer networks, career management services, conferences, research and publications. Members participate in the activities of more than 65 chapters in the United States. FEI is located at Morristown, New Jersey. Visit http://www.financialexecutives.org for more information.
About the Society for Corporate Governance
Founded in 1946, the Society for Corporate Governance, Inc. is a nonprofit trade association of more than 3,400 corporate and assistant secretaries, in-house legal advisers, outside advisers, and other governance professionals who serve approximately 1,600 entities, including 1,000 companies of almost all sizes and industries. Members are responsible for supporting their board of directors and executive management in areas such as board practices, compliance, regulatory and legal matters, shareholder relations, subsidiary management and sustainability. Visit http://www.societycorpgov.org for more information.
Lili DeVita, FEI, 973.765.1021, [email protected]
Claudine Cornelis, Crimson Communicates, 845.424.6342, [email protected]