It is our deep pleasure and privilege to present to you, on behalf of your Advisory Committee on Corporate Disclosure, its Report. This Report is the fruit of twenty-one months of intensive effort by 17 Committee members (later 16, upon the appointment of Committee member Williams to the Chairmanship of the SEC) and variously eight to ten members of the Commission's staff. In addition to that, the work of the Committee was greatly assisted by the American Institute of Certified Public Accountants, the Financial Analysts Federation, the Financial Executives Institute, the New York Stock Exchange and the Securities Industry Association, all of whom contributed generously in advising the Committee and, in some cases, in developing extensive surveys and reports that were of great help. The Committee wishes to thank Dr. Paul A. Griffin of Stanford University and William Van Valkenberg, formerly Page Two of the Commission's staff and currently associated with Mess'rs. Bogle and Gates in Seattle, Washington for the papers they prepared for the Committee. Finally, the Committee wishes to thank all the organizations and individuals who participated in the Committee's case study or responded to the Committee's request for comments on certain issues set forth in Securities Act Release No. 5707, for their valuable advice and assistance. Although not all members agreed unreservedly, the Report concludes that the disclosure system established by the Congress in the Securities Act of 1933 and the Securities Exchange Act of 1934, as implemented and developed by the Securities and Exchange Commission since its creation in 1934, is sound and does not need radical reform or renovation. However, this conclusion does not dictate that the Commission should be indifferent to research which some would suggest has already or may in the future suggest a radical modification of this disclosure system. Further, as is evident from the contents of the Report, it does not suggest that there is no need for significant changes in the Commission's procedures, rules, emphases and approaches to disclosure problems. We would like to commend the Commission for its initiative in creating the Committee, in shaping its broad charter and in supporting its labors. You were generous in furnishing staff and financial resources; we hope that our product is worthy of the support and resources which you gave. This Report should not reach you without recognizing expressly the members of the Committee's staff, some recruited expressly to work on this Report, others taken from their ongoing activities at the Commission to work on the Report. These fine people were Bruce Baggaley, Paul A. Belvin, Hugh Haworth, Robert P. Lienesch, Edythe B. Macchiavello, Eugene Pillot, Jon C. Richards, Michael P. Rogan, S. James Rosenfeld, Patricia C. Rubini, Charles C. Tuck and Charles R. Wenner. All of these people worked unstintingly, enthusiastically, uncomplainingly and creatively and the Report bears a significant imprint of each of them. The most resounding gratitude and recognition must belong to Mary E.T. Beach. Mrs. Beach, as nearly as any one person, has been the central, couldn't-have-done-without, All of us are appreciative to the Commission for the pleasure of this experience and the opportunity to contribute to the ongoing work of the Commission which has earned a remarkable reputation as a responsible and responsive agency. All of us stand ready to lend whatever further assistance we may be able to render in carrying out the recommendations of this Report. *These members have prepared separate statements expressing their views on certain issues examined by the Committee. Their statements are included in the Digest of the Report. Committee member Homer Kripke dissents from this Report for the reasons set forth in his statement which begins at page D-49 of the Digest of the Report. |