In a recent speech, SEC Commissioner Daniel M. Gallagher stated that the SEC must “take exception to efforts by third parties that attempt to prescribe what should be in corporate filings,” indicating that it is the SEC’s “responsibility to set the parameters of required disclosure.” In his March 27 remarks, Commissioner Gallagher singled out the Sustainability Accounting Standards Board (SASB) as an example of a third party attempting to prescribe disclosure standards. The SASB is a nonprofit organization created in July 2011 to develop accounting standards for public companies to use in disclosing material sustainability matters in SEC filings.
Specifically, Commissioner Gallagher noted that, “while companies are free to make whatever disclosures they choose on their own time, so to speak, it is important to remember that groups like SASB have no role in the establishment of mandated disclosure requirements.” He pointed out that, with the sole exception of financial accounting—where the SEC has recognized FASB standards—the SEC “does not and should not delegate to outside, non-governmental bodies the responsibility for setting disclosure requirements.”
It remains to be seen what impact, if any, the SASB will have on public company disclosures. What is clear is that at least one SEC Commissioner thinks that the SASB should have no role in establishing mandated disclosure requirements.