I am raising the question here and internally at the SEC as to whether investors need and are optimally served by the detailed and lengthy disclosures about all of the topics that companies currently provide in the reports they are required to prepare and file with us.
When disclosure gets to be “too much” or strays from its core purpose, it could lead to what some have called “information overload” – a phenomenon in which ever-increasing amounts of disclosure make it difficult for an investor to wade through the volume of information she receives to ferret out the information that is most relevant.
Interestingly enough, Congress provided us with just that opportunity when it passed the JOBS Act in 2012. Section 108 of that Act requires us to comprehensively analyze the rules that form the underpinnings of our disclosure regime.
In addition, we should consider whether we should have line item disclosures for certain topics or, instead, a principles-based approach.