Do We Need to Rethink Materiality?

Publicly traded companies are required to disclose information that is “material” to reasonable investors. A “reasonable investor” has been defined by the U.S. Supreme Court to ensure that investors are given enough information to make an informed investment decision, yet not so much information that they become overwhelmed. Materiality has been at the center of American securities laws for nearly a century. Today, amidst increasing discussion of a growing list of ESG disclosure topics, materiality is coming under renewed scrutiny.

Should the Securities and Exchange Commission (SEC) maintain the current materiality standard? Should it be modified to account for a growing interest in ESG issues? In the age of modern computers and artificial intelligence, how much information is too much? What cost does obtaining and disclosing vast amounts of information have on companies and ultimately their investors? Does disclosure alone provide investors with enough information to make informed investment decisions? We will explore these questions and more in this event.

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Featured Participants

Panel discussion with:

Jill Fisch
Professor, University of Pennsylvania Carey Law School

Amanda Rose
Professor, Vanderbilt University Law School

In light of restrictions related to the COVID-19 pandemic, BPC events have shifted to all remote formats, such as video teleconferences or calls.