Less Mandatory Disclosure Is Rarely Better Disclosure

#business #croatia

A US SEC proposal letting companies omit some mandatory disclosure raises the question of where simplification ends and reduced transparency begins.

SEC Chair Paul Atkins gave remarks at the Society for Corporate Governance Conference on 9 July 2026, announcing that reforming Regulation S-K will be a priority — specifically, introducing a so-called "materiality overlay" mechanism that would let companies omit certain otherwise-mandatory disclosure items if they judge the information isn't material.

The argument behind this proposal sounds reasonable on first read: less administrative burden, reports that focus on what actually matters to investors. The problem is who decides what counts as "material" — and the answer is: the very company being reported on.

That's the key distinction worth naming directly. When a regulator mandates a disclosure item, it does so precisely because it judged that the information should exist regardless of whether the company itself considers it important. Handing that judgment back to the company doesn't simplify reporting — it removes external control over what gets hidden behind the word "immaterial."

This isn't an objection to simplification as a concept — genuine bureaucratic excess exists and genuinely costs money. But there's a difference between removing items that are outdated or duplicated, and introducing a mechanism by which the company itself decides what an investor may or may not see.

The SEC is also weighing a broader role for the Division of Corporation Finance in the "no-action" letter process tied to shareholder proposals (Rule 14a-8) — a separate but related signal: a shift toward less formal, more discretionary regulation.

GNK ASG d.o.o. publicly discloses audited financial statements precisely because we believe transparency toward the market shouldn't depend on who is doing the judging. When that judgment is handed to the party being reported on, the whole system loses the reason it exists.