New SEC Disclosure Requirements Increase Corporate Counsel's Load

Lora Bentley

General counsel and risk professionals have expanded roles and more influence in 2010, according to Forrester. New disclosure requirements regarding board structure and risk oversight strategy, as well as a growing trend to bring e-discovery efforts in house are partly to blame.


But according to, the new requirements regarding disclosure of executive compensation, which take effect next month, will also create more headaches for corporate attorneys. In fact, EMC deputy general counsel Susan Permut went so far as to say analyzing pay packages to identify those that may "have a material adverse effect on the company" is as tricky as finding a needle in a haystack.


To accomplish the task, most legal departments are enlisting the help of risk managers, finance chiefs and human resources specialists. The Securities and Exchange Commission has also issued guidelines containing examples of situations that might be too risky, writer Amy Miller says. For instance, business units that are significantly more profitable than others could post a problem, as could a business unit that carries a larger portion of the company's risk profile.


As always with new agency rules, these are subject to individual interpretation, which means differences will arise from company to company. As such, the SEC will more than likely be issuing additional more specific guidelines as the work progresses, says Sheppard Mullin Richter & Hampton partner Gregory Schick.

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