Building

Perspectives

2019 SEC and other regulatory priorities

As published in 'NACD Directorship' magazine, 2019 Governance Outlook, December 2018

Projections on emerging board matters

By Mark Miskinis, Consuelo Hitchcock, Ashley Elizabeth Corey, and Andrea Perdomo, Deloitte

The US Securities and Exchange Commission (SEC) chair, Walter Joseph “Jay” Clayton, has consistently emphasized in discussions about SEC priorities the need to give attention to all three prongs of the agency’s mission: “Protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation.” In meeting its oversight responsibilities, the SEC took action in a number of areas in 2018 that underscored its focus on facilitating capital formation while maintaining appropriate investor protections. Consistent with its governance role, the board, as a whole or through its committees, should keep these priorities in mind as directors engage with management to understand how their companies are monitoring and adjusting to regulatory changes.

This is especially important in the areas that are likely to be a continued focus for the SEC in 2019:

  • Facilitating capital formation
  • Disclosure effectiveness
  • Cybersecurity disclosure
  • Implementation of new accounting and auditing standards
  • Proxy issues

The SEC has frequently stressed the importance of board involvement and oversight in financial and securities-related matters. It is likely that 2019 will continue to bring regulatory change to public companies. As such, boards will need to stay vigilant and ensure that there are adequate policies and mechanisms in place to keep directors informed of these regulatory developments, and they will need to understand how management intends to address them.

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