Risks, disclosure, and IT

Disclosure web sites will not be able to rely on the assumption that their viewers will use the same proprietary technologies the host businesses do.
Written by Paul Murphy, Contributor

Sun's president, Jonathan Schwartz, has been using his blog to demonstrate his arguments in a public dialog with SEC chairman Christopher Cox about the use of company web sites and related internet technologies in meeting SEC "regFD" (the full and fair disclosure stuff) requirements.

As part this Schwartz suggested, last week, that the SEC issue "clear directives: on the presentation and accessibility of information on corporate websites."

Here's a critical bit:


What we propose is a new policy under which online communications would fully satisfy Regulation FD's broad distribution requirement provided that:


  1. for a webcast (and related slides), the webcast is made available on a company's investor relations site and notice of the webcast is posted at least three business days in advance or as early as possible;


  2. for a corporate blog or individual blog of a senior official of the Company (as defined in Reg FD), the blog is linked prominently to the company's investor relations site; and,


  3. for a press release, it is posted to the company's investor relations site within the time periods specified for Form 8K filings.

To ensure broad access, these online communications would satisfy Reg FD only if they were:


  1. offered via a broadly accessible Web syndication format, such as RSS or Atom;


  2. made available for at least 1 year;


  3. accessible using any open, non-proprietary, free browser on any standard OS;


  4. accessible to persons with disabilities;


  5. made available in an open, non-proprietary, royalty free format; and,


  6. accessible without registration, restriction, or fee.

My guess is that something like this will get adopted - and when it does, all kinds of unexpected consequences will follow.

The most obvious of these is simply that disclosure web sites will not be able to rely on the assumption that their viewers will use the same proprietary technologies the host businesses do.

In other words, this discussion on the accessibility of legally mandated disclosure could prove to be the thin edge of a very large wedge that ultimately establishes a new standard for the web, one based on neither the lowest common denominator nor the most expensive one, but the most open one.

Those elements, for example, of the SEC's own website which are inaccessible to people not using the latest version of IE on the latest version of Microsoft's x86 operating system will need to be revised to accommodate luddites like me who prefer not to play the monopoly game.

There's also lots of scope for irony here - for example, we can probably expect to see a lot of companies, including Microsoft demonstrating their inability to control their own IT by out-sourcing their disclosure sites to people willing to step outside the Microsoft world - and therefore that looking up who owns and operates a company's disclosure site could provide more information about the company's internal state than the disclosures themselves.

So, bottom line: open source services will become a money maker for law firms - something so absurd that it could only happen in IT, but my guess is we'll see it happen - and relatively soon too.


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