It can be disheartening to know that you spend much of your career drafting disclosure that few wind up reading. To some extent, AI will change this – as AI agents are happy to read your disclosures without falling asleep. But this paper by Professors Anne Tucker and Timothy Lytton – “The Hidden Work of Disclosures” – gives us other reasons why disclosure matters.
Here’s a summary of the paper drawn from a blog by John Jenkins (who in turn summarizes this CLS Blue Sky Blog):
1. Disclosure Empowers Lawyers: SEC disclosure requirements elevate counsel’s role and give lawyers authority to ensure portfolio managers act consistently with promises made to shareholders.
2. Disclosure Builds a Compliance Culture: The disclosure process fosters cross-functional collaboration, with lawyers and outside counsel promoting trust, benchmarking practices and strengthening reputation and investor confidence.
3. Disclosure Promotes Institutional Learning: Periodic reviews align disclosures with operations, while professional networks spread best practices and encourage industry-wide convergence.
