NACD Audit Committee Chair Advisory Council: Next-Generation Financial Disclosures

In brief: Amid growing complexity of corporate financial statements and initiatives by regulators and standard-setters to improve effectiveness of disclosures, a recent meeting of the NACD Audit Committee Chair Advisory Council focused on next-generation disclosure, based on lessons learned from General Electric’s revamp of their 10-K statement. The discussion covered the following topics:

• Using the 10-K as a strategic document
• Improving readability and utility of disclosures
• Aligning the 10-K with other company communications
• Extending the value of disclosures to traditionally “passive” stakeholders
• Becoming an advocate for more meaningful disclosures

This brief includes a list of questions from NACD and meeting co-hosts KPMG and Sidley Austin that audit committee members can ask management regarding improved disclosure.

This resource can help your board:

• Understand how to tell the company’s story in financial statements.
• Consider changes to financial statements that allow the company to comply with existing disclosure standards.

Most relevant audiences: Audit committee members, general counsel