With the 2016 proxy season quickly approaching, reporting companies will begin contemplating the various disclosures they will make, both in response to regulatory requirements as well as voluntarily, in their proxy statements. Increasingly, audit committees in particular are being asked to voluntarily provide enhanced disclosure relating to how they perform their oversight duties and responsibilities. Certain institutional investors, regulatory authorities and corporate governance advocacy/industry groups, for example, have urged audit committees to make more meaningful disclosures. It is argued that greater transparency of an audit committee’s oversight duties and responsibilities and relationship with external auditors may provide, among other benefits, more reliable financial reporting processes and a more independent audit environment, thus achieving increased investor confidence and greater alignment with shareholder interests.
This corporate governance update (1) highlights certain current issues and recent regulatory developments with respect to audit committees and corresponding disclosures, (2) summarizes the current audit committee disclosure policies and positions of several large asset managers and pension funds, and of certain other corporate governance advocates, to provide insight into the expectations of these entities with respect to such disclosures and (3) presents practical considerations for audit committees and boards to help facilitate discussion on audit committee disclosures.
This Corporate Governance Quarterly Update was published by Law360 on January 19, 2016. Click here to read the Law360 article.