TheCorporateCounsel.net

While much of the focus over the years has been on the robustness of audit committee disclosures in SEC filings, the topic of direct engagement between investors and audit committees has not been discussed as often. Investors have sought out engagement on compensation issues with compensation committee chairs for many years now after the advent of say-on-pay, but investor engagement with audit committee chairs seems to be less common.

Earlier this year, the UK’s Financial Reporting Council (FRC) announced the launch of a new web page that provides a series of conversation starters for engagement between investors and audit committees. The FRC indicates in the announcement that direct engagement with investors can provide insight into “the company’s approach to regulatory focus and areas of interest to market participants.”

While these conversation starters are UK-oriented, they are still useful for audit committees of US companies as a way of understanding the particular areas that investors may be focused on, which could aid in expanding disclosures or direct engagement efforts.

– Dave Lynn