Maintaining Accurate Web Site Disclosure Records

The accessibility and popularity of the Internet has seen the corporate/ investor web site move to the front line of disclosure. To protect the interests of both the broader investment public and the issuer, companies must ensure the same stringent approach toward web site disclosure as they do to ensure accuracy in core documents.

One very compelling reason to do so is the fact that material information extends beyond regulatory filings and core documents to potentially any communication. Information is material if its `omission or misstatement could influence a reasonable investor’s decision to buy, hold or sell securities in the company’. (In addition, information not considered to be material may become so when viewed in the context of other disclosures or as elements in a larger picture.)

Considering the threshold for materiality it’s surprising that most companies could not conclusively verify the content of their web site at a given time in order to address a regulatory or investor inquiry. Nor could they demonstrate that the proper approval process was followed in disclosing non-core information on the web site. (See full article for information on additional risks.)

To reduce risk associated to web site disclosure issuers should:

  1. Develop comprehensive and practical disclosure controls and procedures to govern both core and non-core communications – including the corporate web site
  2. Ensure that accurate, easily searchable records are captured to verify all web site content and associated approvals
  3. Make certain that records are stored in a highly secure environment to prevent tampering
  4. Ensure that records can be accessed quickly by a number of authorized people within your company

What should your record consist of?

  1. Text and images
  2. Presentations (PowerPoint, Flash, video, audio)
  3. PDF documents
  4. Information provided through data-feeds such as press releases, stock quotes, regulatory filings

In addition, it’s important to know not only what was on your site, but also, the context in which the user viewed your information (e.g. links to and from content, information positioned alongside other matter) in order to understand how impressions were formed.

Ways of Maintaining Accurate Web Site Records

There are several ways that one can achieve a web site record. Some methods are more accurate and/or time consuming than others. The various methods include:

  1. Manual record keeping of all components
  2. Page level versioning (a feature of some content management systems)
  3. Site scraping (software that `scrapes’ your site at predetermined intervals in order to capture a record)
  4. Integrated, real-time records capture system

The following chart highlights some of the strengths and weaknesses of each method. Details on these methods and how to make some of them work better are included within the full article.

[tags] Bill 198, Sarbanes Oxley, MI 52-109, CEO and CFO Certification, SOX 302, SOX 404, Risk Management, Compliance, Disclosure controls, Disclosure, SEC, OSC [/tags]
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