Maureen Bujno is a managing director in Deloitte LLP’s Center for Board Effectiveness, and Benjamin Finzi and Vincent Firth are managing directors at Deloitte Consulting LLP. This post is based on a Deloitte memorandum by Ms. Bujno, Mr. Finzi, Mr. Firth, Kathy Lu, and Mark Lipton.
Introduction
To be a CEO today is to have one of the most complex and demanding—not to mention visible—jobs in the world. Beyond the scope of their business, CEOs and the organizations they lead have increasingly significant and more transparent influence at multiple levels—societal, cultural, environmental, political—affecting vast numbers of stakeholders, including shareholders, employees, customers, and citizens. Meanwhile, the world around them is in constant motion.
Given the weight of responsibility that rests on their shoulders, it’s no wonder that CEOs, when observed from a distance, are often depicted in near-heroic terms. It’s also not surprising that CEOs, when engaged in more intimate conversations about their role, are often keenly interested in finding help to validate their models of the business environment and to develop their vision of the future.
But where can CEOs find the sounding board they need without falling short of the extraordinary abilities that people find reassuring to attribute to them? One possible answer lies in the recognition that CEOs also have bosses: the boards who hire them, evaluate them, set their pay, and sometimes fire them. In fact, as one CEO told us, “The board relationship is really the most critical factor in [a CEO’s] success.”
Joint Statement on Proposed Changes to Regulation S-K
More from: Allison Herren Lee, Robert Jackson, U.S. Securities and Exchange Commission
Robert J. Jackson, Jr. and Allison Herren Lee are Commissioners at the U.S. Securities and Exchange Commission. This post is based on their recent public statement, available here. The views expressed in the post are those of Commissioners Jackson and Lee, and do not necessarily reflect those of the Securities and Exchange Commission, the other Commissioners, or the Staff.
We support sending out for public comment the recently proposed revisions to Regulation S-K, the central repository for non-financial statement disclosure. We’re especially grateful to our colleagues in the Division of Corporation Finance, Director Bill Hinman, Betsy Murphy, Felicia Kung, Lisa Kohl, Elliott Staffin, Sandra Hunter Berkheimer, and Shehzad Niazi for their careful and diligent work on this proposal.
We want to start by noting that the proposal is commendable for adding disclosure on the critical topic of human capital. This reflects an understanding of what American families have known for generations: companies that invest in their workers perform better over time. [1]
We write to encourage comment in two critical areas where we believe the proposal should be improved. Specifically, we are concerned about the shift toward a principles-based approach to disclosure and the absence of the topic of climate risk. We urge commenters to come forward to help ensure that our rules produce the comparability and transparency that American investors deserve.
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