Considerations for External Disclosures Related to Board Oversight of Disruptive Risks

In brief: As expectations of investors and society continue to evolve and the SEC increasingly focuses on disclosure of disruptive risks, boards of US public companies should confirm that their companies have adequate controls and procedures in place to identify disruptive risks, assess and analyze their impact on a company’s business and strategy, and make timely disclosures regarding such risks where appropriate. This tool outlines considerations for determining whether and how to disclose information about disruptive risks facing a company and board oversight of such risks. It includes examples of committee charter provisions from several large public companies that have delegated responsibility for reviewing the process for assessing and managing disruptive risks to a board committee. It also summarizes the US Securities and Exchange Commission (SEC) disclosure requirements and guidance most likely to trigger disclosure of disruptive risks. Directors can use this material when considering possible changes or enhancements to their company’s disclosures.

Most relevant audiences: board chairs, lead independent directors, CEOs, audit and risk committee members, chief risk officers, and heads of internal audit