Materiality is a key element of the U.S. public company disclosure framework, but materiality is a subjective legal standard with no “bright line” definition. In an effort to help companies determine what is material and eliminate unnecessary disclosures in financial statements, the Financial Accounting Standards Board (FASB) recently issued two exposure drafts addressing materiality in accounting standards and concepts.
The NYSE recently amended its rules relating to the release of material news by listed companies. Under the new rules, listed companies are required to notify the NYSE prior to releasing material news between 7:00 am and 4:00 pm Eastern Time. Previously, this notification requirement applied only shortly before the opening of trading and during the 9:30 am to 4:00 pm trading session.
As part of its annual policy survey, ISS recently asked public companies and institutional investors about the maximum number of boards on which it is appropriate for a director to sit. With respect to directors who are not active CEOs, 34 percent of investor respondents indicated that four total board seats is an appropriate limit.
ISS also surveyed public companies and investors about the types of “material restrictions” in proxy access provisions that should result in a recommendation to vote against directors. The survey focused on situations where a proxy access shareholder proposal has received majority support but the board has adopted a policy with restrictions not contained in the shareholder proposal.
The Ticker shares recent developments in SEC compliance, capital markets, corporate governance, executive compensation and other matters important to public companies and their officers and directors. It is published by Fredrikson & Byron’s Public Companies Group.