As part of our blog series based on this great panel – featuring WilmerHale’s Lily Brown and Edward Jones’ Keir Gumbs – here’s a blog that addresses the question of: “When you are in charge of a disclosure team, what is your process to ensure people deliver timely and competently?”
Keir Gumbs, Edward Jones: I’ve been very fortunate as I’ve had several very strong disclosure teams that I’ve worked with in-house. The starting point is having really smart, competent people who care about disclosure. We’re all “securities geeks” in a sense and I’ve been fortunate in both organizations that I’ve had people who really care about what it is that we’re putting in these disclosures. They really take it to heart.
I like to have people who are very familiar with what the rules are. We have a checklist that we use when working through the process of identifying who’s providing what disclosures and where those disclosures are coming from. Making sure we have backup from those disclosures.
The most important part of the process overall is the role of the disclosure community. I am a massive advocate of a fully functioning and engaged disclosure committee, where you bring in Financial Reporting and Legal and then you have each of the subject matter experts come in and share here’s what’s happening in my world this quarter and then leaving that for the disclosure committee to assess what needs to go in and what doesn’t go in to the disclosure.
I’d say without fail that we’ll have a disclosure committee meeting where we’ve got the draft document put together – where we started with the outline, accumulated the information, put together the backup – and then you get to the disclosure committee and you have a conversation and inevitably there’s something that comes out of that conversation where you realize, “oh, I need to modify this or we’re completely missing the ball on that or we need to do more diligence on this this thing.”
So for me, that is by far the most important part of that process – where you bring in all of those teams together providing their input on the relevant disclosure document as well as what’s happening in the world so you can make that decision about what the disclosure should be.
Lily Brown, WilmerHale: I always start with what’s the desired time frame or the required time frame and work back from that. Making sure that you bring in your experts early on. From my perspective, when working on disclosure with clients, you make sure that everyone understands the expectations and time frame and make sure that people are communicating regularly with check-ins.
The key thing for getting a good outcome on any project is context. If you’re starting a new project or a new deliverable, it’s about understanding why you’re doing what you’re doing that matters. What is the larger context for it? Because it’s critical – and more interesting – for the drafter to understand why it matters and how it fits into everything else. Context is a huge aspect of this.
If you have a new disclosure requirement that we’re all dealing with, if there’s not a basic working understanding of why the SEC thinks that disclosure requirement is appropriate at this point, it’s going to be harder to create and review good disclosures. Understanding that overall context and then balancing that against market practice is key. The specific disclosure approach and culture of a particular company you’re working.
