Society for Corporate Governance Proposes Reforms to SEC Disclosure for Small and Mid-Cap Companies
New York, NY – July 7, 2025 – The Society for Corporate Governance, a leading advocate for effective corporate governance practices, has formally submitted a comprehensive set of recommendations to the U.S. Securities and Exchange Commission (SEC) aimed at reforming disclosure requirements and filer categories for small- and mid-cap companies. The proposals, detailed in a recent public interest release by PR Newswire, seek to strike a more appropriate balance between investor protection and the administrative burdens faced by these vital segments of the economy.
Recognizing the unique challenges and resource constraints often encountered by smaller public companies, the Society’s recommendations are designed to foster a more sustainable and efficient reporting environment. The core of their submission centers on the concept of “scaled disclosure,” which advocates for tailoring the complexity and volume of required information based on a company’s size, market capitalization, and public float.
The Society highlights that while robust disclosure is crucial for informed investment decisions, overly burdensome requirements can disproportionately impact small- and mid-cap companies. This can lead to increased compliance costs, diversion of management attention from core business operations, and potentially hinder their ability to access capital and grow. By implementing scaled disclosure, the SEC could enable these companies to focus their resources on innovation and job creation, while still providing investors with material and relevant information.
Key areas addressed in the Society’s recommendations include:
- Tiered Reporting Requirements: The proposal suggests establishing distinct reporting tiers for different categories of companies, with smaller entities benefiting from reduced disclosure obligations in non-critical areas. This could involve streamlining the format or reducing the frequency of certain disclosures.
- Focus on Materiality: A strong emphasis is placed on ensuring that all disclosures are truly material to investment and voting decisions. The Society advocates for a more rigorous assessment of what information is essential, thereby reducing the inclusion of boilerplate or less impactful data.
- Leveraging Technology and Innovation: The recommendations also explore how technological advancements and innovative reporting tools could be utilized to make compliance more efficient and accessible for smaller companies.
- Rethinking Filer Categories: Beyond disclosure, the Society has put forth suggestions for re-evaluating and potentially refining existing filer categories. This could lead to a more nuanced approach that better reflects the diverse characteristics and reporting needs of companies falling outside the large-cap sphere.
The Society for Corporate Governance believes that these proposed reforms will not only alleviate significant burdens on small- and mid-cap companies but also contribute to a more dynamic and inclusive capital markets ecosystem. By fostering an environment where smaller enterprises can thrive, these changes have the potential to encourage more companies to access public markets, ultimately benefiting investors and the broader economy. The Society looks forward to engaging with the SEC and other stakeholders to further refine these important proposals.
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PR Newswire Policy Public Interest published ‘Society for Corporate Governance Submits Recommendations to SEC on Scaled Disclosure and Filer Category Reforms for Small- and Mid-Cap Companies’ at 2025-07-07 15:00. Please write a detailed article about this news in a polite tone with relevant information. Please reply in English with the article only.