Maintain the Materiality Standard for Public Company Disclosure – It Works | Business Roundtable


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Maintain the Materiality Standard for Public Company Disclosure – It Works

In a new white paper, Business Roundtable details how the materiality standard for determining public company disclosure obligations benefits investors and helps U.S. capital markets function properly.

According to The Materiality Standard for Public Company Disclosure: Maintain What Works

For Eight Decades, Materiality Has Been the Foundational Principle Under U.S. Securities Laws for Determining Whether a Public Company Must Disclose Information to Investors

The materiality standard requires disclosure if a reasonable investor would consider the information important in making an investment or voting decisions.

New Congressional Mandates Are Undermining the Materiality Standard

Unfortunately, in an attempt to solve societal concerns unrelated to investor protection, Congress increasingly deviates from the standard by requiring disclosure of immaterial – and, in some cases, misleading – information.

The federal securities law is the wrong tool for the job of addressing social issues.

The Materiality Standard Best Serves and Protects Investors

Materiality helps ensure that investors receive important and relevant information and protects them from an avalanche of immaterial details.

Click here to read coverage of the white paper in The Wall Street Journal.

Read the full report