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Berkshire Hathaway Inc BRK BRK has reportedly agreed to disclose in a better way how its board of directors manages risks, including those taken by Chairman Warren Buffett after the Securities and Exchange Commission asked the company to do a better job.
What Happened: In correspondence that was made public on Tuesday, the regulator’s division of corporate finance asked Berkshire to “enhance” its risk management disclosures in its annual proxy filings, reported Reuters. Following this, Berkshire agreed to make the requested changes.
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The SEC asked for more disclosures on how the company’s board addresses short- and long-term risks and the extent to which the board communicates with management and outside experts to identify future risks. It also sought more disclosures on why the board oversees risk management instead of delegating it to a committee, the Reuters report said.
The SEC also asked the company to answer whether its lead independent director can override Buffett on risk matters or ask the board to consider them. The regulator had made these requests in a Sept. 2, 2022 letter following which Berkshire Chief Financial Officer Marc Hamburg agreed to them six days later, the report said.
Why It Matters: Some analysts have long called for Berkshire to disclose more about itself. Although the company owns dozens of businesses, many are discussed in only a few sentences or paragraphs in its annual reports, the Reuters report indicated.
Berkshire does not hold analyst calls and communicates to the public mainly via financial disclosures, annual meetings and Buffett’s annual shareholder letter, the report added.
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Image and article originally from www.benzinga.com. Read the original article here.