TheCorporateCounsel.net

If you haven’t already received a comment letter, be aware that Corp Fin is taking a close look at disclosure of board leadership structures and risk oversight functions. These comments are going to many companies – it’s not apparent that this initiative is focusing on companies in particular industries or with particular governance structures. What’s the Staff looking for? Here’s one of the comments:

Please expand your discussion of the reasons you believe that your leadership structure is appropriate, addressing your specific characteristics or circumstances. In your discussion, please also address the circumstances under which you would consider having the Chair and CEO roles filled by a single individual, when shareholders would be notified of any such change, and whether you will seek prior input from shareholders.

Other comments suggest that the Staff is seeking detailed disclosure about how the board administers the risk oversight function and the role of the independent chair or lead independent director.

So far, it sounds like all of the comments request that changes be made in future filings, versus amending earlier disclosures. It is striking how far beyond any specific disclosure line items these comments seek to go, but at the same time the requested disclosures seem innocuous enough that some companies may just agree to the disclosures to make it go away.

If you’re working on a response to this or any other Staff comments, make sure to consult our “SEC Comment Letter Process” Handbook – which includes fresh, practical insights from Sidley’s Sonia Barros and Sara von Althann on how to best navigate that process. If you’re not already a member with access to this useful resource, sign up now and take advantage of our no-risk “100-Day Promise” – During the first 100 days as an activated member, you may cancel for any reason and receive a full refund.

– Liz Dunshee