How to Draft a Comprehensive Disclosure Committee Charter

Note: Links to our free templates are at the bottom of this long guide.
Also note: This is not legal advice

Introduction

Creating a comprehensive disclosure committee charter is of the utmost importance for any organization. It sets out the mission and responsibilities for this committee, which is tasked with overseeing the organization’s disclosure process, making sure all necessary disclosures are accurate and on time. The charter also lays out roles and procedures for members of the committee, so they can identify, evaluate, and report any potential disclosure issues in order to stay compliant with regulations.

Having a well-written charter can go beyond just compliance though. It can reduce risk of litigation or regulatory action by helping to identify any potential issues before they become major problems. A comprehensive document will also ensure that individuals on the committee have no conflicts of interest between them - meaning their decisions will truly be in the best interests of the organization as a whole.

The Genie AI team understands how crucial it is to get your disclosure committee charter right – our free template library millions of data points that teach us what makes up a market-standard document. With our help you can produce high quality charters without having to hire an expert lawyer – allowing you access to expert guidance at an affordable price point. For more information on how Genie AI’s library works, click below for our step-by-step guidance - and start creating your own tailored charters today!

Definitions

Board of Directors: A governing body of a company composed of people elected or appointed to represent the company’s shareholders.

Committee: A group of people brought together to discuss, investigate, or decide on a particular issue.

Charter: A written document that outlines the purpose, duties, and responsibilities of an organization.

Material information: Information that is important to investors in making decisions about a company.

Expertise: Knowledge and skill in a particular area.

Disclosure: To provide information or make something known.

Applicable laws and regulations: Laws and regulations that are relevant to a situation.

Scope of authority: The extent to which a person or group is able to make decisions, act, or enforce rules.

Materiality: How important or significant something is.

Financial standing: How financially secure a company is.

Legal consequences: The results of a legal action, such as a court case.

Budget: A financial plan that allocates resources and expenses.

Stakeholders: People or organizations that are invested in the success of a company.

Confidential information: Information that is not intended to be shared with the public.

Timeline: A schedule of events or a period of time in which something is to be accomplished.

Reporting: The act of providing information.

Integrity: The quality of being honest and having strong moral principles.

Disseminating: To spread or distribute information.

Contents

1. Establishing the parameters of the committee and its members
2. Identifying committee members
3. Defining the committee’s scope of authority
4. Setting out the committee’s responsibilities
5. Defining the committee’s authority and resources
6. Determining the committee’s authority
7. Establishing guidelines for the use of resources
8. Establishing guidelines and criteria for evaluating material information
9. Defining the criteria for evaluating material information
10. Setting out a process for evaluating material information
11. Setting out a process for making disclosure decisions
12. Identifying criteria for disclosure decisions
13. Establishing procedures for disclosure decisions
14. Establishing a timeline for making disclosure decisions
15. Setting out a timeline for the disclosure process
16. Setting out reporting requirements
17. Establishing procedures for maintaining the confidentiality of sensitive information
18. Establishing procedures for securely storing confidential information
19. Establishing procedures for accessing confidential information
20. Establishing reporting mechanisms for the disclosure committee
21. Setting up protocols for reporting to external stakeholders
22. Establishing reporting requirements for committee members
23. Establishing an ongoing review and monitoring process for disclosure decisions
24. Establishing a process for monitoring and reviewing disclosure decisions
25. Establishing protocols for addressing any changes to disclosure decisions
26. Developing communication strategies for disseminating information to stakeholders
27. Setting up protocols for regularly reviewing the committee’s policies and procedures

Get started

Establishing the parameters of the committee and its members

• Outline the purpose of the committee, including the scope of the committee’s authority
• Identify the reporting structure of the committee, including who the committee will report to
• Set the frequency for meetings of the committee
• Establish the type of information the committee will require from members
• Determine the level of access to company data and resources the committee will have
• Define the voting process and decision-making authority of the committee
• When all of the above have been established, you will have established the parameters of the committee and its members, and can move on to the next step.

Identifying committee members

• Determine who should serve on the disclosure committee, such as officers and directors, with representatives from key departments, such as finance and legal
• Consider assigning a chairperson to the committee
• Invite those selected to join the committee
• When all members have been identified and accepted their invitation, the step is complete
• Move on to the next step, which is defining the committee’s scope of authority.

Defining the committee’s scope of authority

• Outline the reasons for the creation of the disclosure committee
• Set out the authority of the committee and its members
• List the specific activities the committee is responsible for
• Specify which members of the committee have the authority to approve certain decisions
• Determine how often the committee should meet and what type of reports should be generated
• Define the committee’s decision-making process and voting requirements
• Establish the rules and procedures for the committee’s operations

When you can check this off your list and move on to the next step:

• Once you have outlined the scope of authority of the disclosure committee, you can move on to the next step of setting out the committee’s responsibilities.

Setting out the committee’s responsibilities

• Outline the specific tasks, duties and responsibilities of the Disclosure Committee.
• Identify the members of the Disclosure Committee and their roles and responsibilities.
• Establish the frequency of Disclosure Committee meetings and the meeting procedures.
• Define the Disclosure Committee’s reporting requirements.
• Determine the Disclosure Committee’s budget and resources.
• Establish policies and procedures for the disclosure process.

When you can check off this step:

• When you have identified the members of the Disclosure Committee and outlined their roles and responsibilities.
• When you have established the frequency of Disclosure Committee meetings and the meeting procedures.
• When you have defined the Disclosure Committee’s reporting requirements.
• When you have determined the Disclosure Committee’s budget and resources.
• When you have established policies and procedures for the disclosure process.

Defining the committee’s authority and resources

• Establish the committee’s authority by determining what decisions they can make on behalf of the company.
• Assess the resources available to the committee to inform their decision-making process.
• Include the allocation of any necessary funds to the committee’s budget and identify the personnel resources available to them.
• Make sure to list the types of activities the committee is authorized to undertake in order to meet its objectives.
• Once these items have been identified and documented, the committee’s authority and resources will be defined.

Determining the committee’s authority

• Review the company’s charter and bylaws to determine the authority granted to the Disclosure Committee.
• Identify any existing policies, procedures, and protocols related to the activities of the Disclosure Committee.
• Draft a charter that outlines the authority and scope of the Disclosure Committee.
• Get approval from the board of directors for the charter.
• When approved, the charter should be documented and stored in a secure, accessible place.

Once the charter is approved and documented, the step is complete and you can move on to the next step: Establishing guidelines for the use of resources.

Establishing guidelines for the use of resources

• Establish guidelines for how the committee can use organizational resources to carry out their role, such as the budget for investigations, outside consultants, and legal counsel
• Ensure the guidelines clarify the permissible use of the organization’s resources to protect confidential information and adhere to the organization’s code of ethics
• Decide on a process for tracking and reporting on the committee’s expenditures
• When the guidelines are established, you can check this step off your list and move on to the next step.

Establishing guidelines and criteria for evaluating material information

• Set out the criteria for evaluating material information including the definition of material information
• Define the criteria for assessing the materiality of information and the thresholds for disclosure
• Identify the process for determining when the committee should be consulted in determining the materiality of information
• Determine the process for determining when the committee should be consulted in determining the content of disclosure
• Establish the process for assessing the risk associated with the disclosure of information

You will know you can check this off your list and move on to the next step when you have defined the criteria for evaluating material information, identified the process for determining when the committee should be consulted in determining the materiality of information, determined the process for determining when the committee should be consulted in determining the content of disclosure, and established the process for assessing the risk associated with the disclosure of information.

Defining the criteria for evaluating material information

• Brainstorm the criteria for evaluating material information and document it in the Disclosure Committee Charter
• Consider the different types of information that need to be evaluated (e.g. financial, legal, operational, strategic, etc.)
• Make sure the criteria considers both quantitative and qualitative measures
• Make sure the criteria is clear and concise to ensure it can easily be understood and applied
• When the criteria for evaluating material information is defined, documented, and approved, you can check this off your list and move on to the next step.

Setting out a process for evaluating material information

• Establish a process to evaluate material information on a regular basis
• Identify a timeline for when the committee should meet and review material information
• Establish criteria for what information should be reviewed, including any guidelines or standards
• Identify a process for evaluating the information and making decisions
• Set out a process for keeping all relevant records and documents
• Establish a timeline for when the committee should provide updates
• Identify a process for reporting to senior management and the board any material information that has been reviewed

Once the process for evaluating material information has been established, this step can be checked off the list and the next step, setting out a process for making disclosure decisions, can be initiated.

Setting out a process for making disclosure decisions

• Determine who should be involved in the disclosure decision-making process.
• Develop a process for disclosure decisions, including the frequency of decision-making and any required approvals.
• Outline the information that must be included in the decision-making process.
• Provide guidance on when a decision should be made to disclose or withhold information.
• Describe the process for updating the disclosure decision-making process as needed.

Once the process for making disclosure decisions is outlined, you can move on to the next step, which is identifying criteria for disclosure decisions.

Identifying criteria for disclosure decisions

• Determine the criteria for making disclosure decisions, such as what information must be disclosed and when
• Consider any existing policies and regulations related to disclosure decisions
• Consult with outside counsel, if necessary, to ensure compliance with any applicable laws or regulations
• Develop a set of criteria to be used to make disclosure decisions
• Have the criteria approved by the Board of Directors
• When the criteria have been approved by the Board, this step can be marked as complete and the process can move on to the next step.

Establishing procedures for disclosure decisions

• Establish procedures for disclosure decisions, including who will make decisions and when.
• Set out specific procedures to be followed in making decisions and in the process of making them.
• Determine whether and how decisions will be reviewed and by whom.
• Specify the roles of those involved in the decision-making process, such as the committee chair, members and staff.
• Consider whether and how decisions will be communicated to stakeholders.

When you have completed this step, you can check it off your list and move on to the next step of establishing a timeline for making disclosure decisions.

Establishing a timeline for making disclosure decisions

• Determine the review and approval timeline required for the disclosure committee to make decisions on the disclosure of financial or material information.
• Set the deadline for the committee’s decision on disclosure, including any information that needs to be collected, reviewed and assessed before the decision is made.
• Establish a timeline for when the disclosure must be made, including any guidelines for how soon the decision must be made following any changes in the financial or material information.
• Determine the process for extending the timeline if more time is needed to review or assess the relevant information.
• Determine the process for shortening the timeline if the disclosure must occur sooner than the established timeline.
• When the timeline for the disclosure decisions is established, check this step off the list and move on to the next step.

Setting out a timeline for the disclosure process

• Establish key deadlines for making disclosure decisions, such as how much time will be given to a team member to review a disclosure before a decision must be made.
• Ensure that the timelines are reasonable, but also allow enough time to properly review the disclosure and make an informed decision.
• Take into account the complexity of the disclosure when setting timelines and allow for enough time for experts to review the disclosure.
• Set out clear expectations for when disclosure decisions should be made and communicated to the relevant stakeholders.
• Develop a process for escalation when disclosure decisions are not made within the set timeframes.
• Once the timeline is set, document it in the Disclosure Committee Charter.

You’ll know that this step is complete when the timeline for the disclosure process is documented in the Disclosure Committee Charter.

Setting out reporting requirements

• Establish a timeline for when reports should be submitted, including frequency and deadlines for report submission
• Determine what information should be included in the reports
• Consider the types of reports needed (e.g., monthly, quarterly, annual, etc.)
• Decide who should be responsible for submitting the reports
• Set up procedures to ensure that reports are submitted on time and in full
• When complete, document and communicate the reporting requirements to relevant stakeholders

When complete, you will have a clear outline of the reporting requirements that need to be adhered to by the Disclosure Committee and stakeholders.

Establishing procedures for maintaining the confidentiality of sensitive information

• Develop a process for ensuring that all confidential information is kept secure and is only shared on a need-to-know basis
• Establish a confidential information policy that outlines rules for handling sensitive information
• Ensure that all staff members who have access to confidential information are trained on the policy
• Establish procedures for securely storing confidential information in both digital and physical formats
• Monitor access to confidential information and audit periodically to ensure compliance with the policy
• When the procedures are in place, document and communicate them to all staff
• Once the procedures for maintaining the confidentiality of sensitive information have been established, you can check this off your list and move on to the next step.

Establishing procedures for securely storing confidential information

• Determine the types of confidential information to be stored
• Designate a secure storage location for all confidential information
• Establish procedures for how confidential information will be protected when stored
• Establish procedures for securely transmitting confidential information to other stakeholders
• Establish procedures for archiving and disposing of confidential information
• Ensure that only authorized personnel have access to confidential information

When you have completed the above steps, you can check this off your list and move on to the next step of establishing procedures for accessing confidential information.

Establishing procedures for accessing confidential information

• Define the level of access to confidential information that is necessary for the Disclosure Committee to accomplish its goals.
• Develop procedures for granting access to confidential information to Disclosure Committee members.
• Develop procedures for monitoring access to confidential information.
• Ensure that confidential information is accessed securely and that access is limited to authorized personnel.
• Ensure that all access to confidential information is documented and tracked.

When you have completed the steps above, you can move on to the next step: Establishing reporting mechanisms for the disclosure committee.

Establishing reporting mechanisms for the disclosure committee

• Explore possible reporting mechanisms (e.g. filing a report, issuing a press release, etc.)
• Develop a strategy to ensure the reporting mechanism is secure, accurate and up to date
• Establish a timeline for the disclosure committee to produce reports and ensure this timeline is adhered to
• Decide on who will be responsible for creating and submitting reports
• Establish a process for reviewing and approving reports prior to their submission
• Review, refine and update reporting mechanisms as needed

Once these steps have been completed, you can move on to the next step of setting up protocols for reporting to external stakeholders.

Setting up protocols for reporting to external stakeholders

• Outline the criteria under which the disclosure committee will provide reports to external stakeholders, such as shareholders
• Determine who is responsible for drafting the reports and disseminating them to external stakeholders
• Specify the timeline for when these reports should be delivered
• Establish the format for the reports
• Establish the type of information that should be included in the reports
• Set up any other protocols for reporting to external stakeholders
• Once all protocols have been outlined and documented, you can proceed to the next step of establishing reporting requirements for committee members.

Establishing reporting requirements for committee members

• Establish guidelines for how often committee members must report their findings and recommendations.
• Decide whether to use an internal reporting system or require reports to be submitted to an external authority.
• Consider how to ensure the reporting process is transparent, accurate and reliable.
• Draft a timeline for when reports must be submitted and define any necessary deadlines.
• Develop a format for the report that committee members must adhere to.
• Determine how to make any necessary corrections or updates to the report in a timely manner.

Once you have established the reporting requirements for committee members, you can move on to the next step in drafting a comprehensive disclosure committee charter.

Establishing an ongoing review and monitoring process for disclosure decisions

• Develop a formal process for the committee to evaluate and monitor disclosure decisions
• Create a review schedule or timeline for evaluating disclosure decisions
• Establish a process to ensure that any changes to disclosure decisions are reviewed and monitored
• Set up metrics to assess the efficacy of the disclosure decisions
• Determine how often the review and monitoring process should take place
• Establish clear criteria for when the review and monitoring process should be triggered
• When the review and monitoring process is complete, document the results of the assessment
• Establish a procedure to ensure that any corrective action or changes to the disclosure decisions are implemented in a timely manner

You’ll know you can check this off your list and move on to the next step when you have created a formal process for the committee to evaluate and monitor disclosure decisions, have set up a review timeline, have set up metrics to assess the efficacy of the disclosure decisions, have determined how often the review and monitoring process should take place, have established criteria for when the review and monitoring process should be triggered, have documented the results of the assessment and have established a procedure to ensure that any corrective action or changes to the disclosure decisions are implemented in a timely manner.

Establishing a process for monitoring and reviewing disclosure decisions

• Create a process for monitoring and reviewing disclosure decisions that involves key stakeholders in the decision-making process.
• Ensure that the process includes a timeline for review and approval, a mechanism for tracking and monitoring disclosure decisions, and a process for addressing any changes to disclosure decisions.
• Establish a policy for ensuring that disclosure decisions are compliant with applicable laws and regulations.
• Develop and maintain a system for collecting and documenting feedback from stakeholders on disclosure decisions.
• Develop and maintain a system for communicating changes to disclosure decisions.
• When the process for monitoring and reviewing disclosure decisions is completed, check this off your list and move on to the next step.

Establishing protocols for addressing any changes to disclosure decisions

• Establish criteria for determining when changes to disclosure decisions are necessary
• Develop a process for addressing any changes to disclosure decisions, including decision-making authorities and timelines
• Ensure that appropriate individuals and teams are notified when changes to disclosure decisions are required
• Develop protocols that are tailored to the specific needs of the organization or sector
• Document all changes to disclosure decisions, including the rationale and any supporting evidence
• When complete, review the protocols and ensure they are up-to-date and properly implemented

How you’ll know when you can check this off your list and move on to the next step:

• When protocols for addressing any changes to disclosure decisions have been established, documented, and reviewed.

Developing communication strategies for disseminating information to stakeholders

• Identify the primary stakeholders who need to be informed of the committee’s disclosure decisions
• Decide the most effective channels for disseminating information to stakeholders, such as email updates, webinars, or press releases
• Draft a communication plan outlining the strategies and timeline for disseminating information
• Make sure the communication plan is regularly reviewed and updated as needed

When you can check this off your list and move on to the next step:

• When the communication plan is finalized, approved, and disseminated to the primary stakeholders.

Setting up protocols for regularly reviewing the committee’s policies and procedures

• Identify a protocol for regularly reviewing the committee’s policies and procedures (e.g. quarterly, semi-annually, annually)
• Establish a timeline for the review of policies and procedures, including deadlines for when the review should be completed
• Assign individuals to be responsible for conducting the review of policies and procedures
• Develop a framework for the review of policies and procedures, including specific steps that should be taken during each review
• Establish a process for incorporating any necessary changes to the committee’s policies and procedures
• Develop a process for monitoring and ensuring compliance with the committee’s policies and procedures
• Document the review of policies and procedures, including any changes that were proposed and/or implemented

You will know you can check this off your list and move on to the next step when you have identified a protocol for regularly reviewing the committee’s policies and procedures, established a timeline for the review, assigned individuals responsible for conducting the review, developed a framework for the review, established a process for incorporating any necessary changes, developed a process for monitoring and ensuring compliance, and documented the review of policies and procedures.

FAQ

Q: What are the benefits of having a Comprehensive Disclosure Committee Charter?

Asked by George on April 21st, 2022.
A: A Comprehensive Disclosure Committee Charter is an important document for companies and organizations of any size as it outlines clear and consistent procedures and rules for handling confidential information. This document is beneficial as it provides guidelines to ensure that confidential information is handled responsibly and in accordance with applicable laws and regulations. This document helps to protect confidential information from falling into the wrong hands, as well as providing guidance on how to handle any potential security breaches. Furthermore, having a Comprehensive Disclosure Committee Charter helps to ensure that senior management and board members are held accountable for any potential breaches or mishandling of confidential information.

Q: What should be included in a Comprehensive Disclosure Committee Charter?

Asked by Abigail on October 10th, 2022.
A: A Comprehensive Disclosure Committee Charter should include an overview of the purpose and scope of the charter, details on the process for handling confidential information, the roles and responsibilities of those involved, procedures for responding to security breaches, timelines for disclosure requirements, and details on how to report any potential violations. Additionally, the charter should also outline any applicable laws and regulations regarding confidentiality, as well as any other relevant company policies. Lastly, the charter should also include provisions for protecting confidential information from being shared with third parties without permission.

Q: How often should a Comprehensive Disclosure Committee Charter be reviewed?

Asked by Matthew on August 7th, 2022.
A: A Comprehensive Disclosure Committee Charter should be reviewed regularly to make sure it is up-to-date in regards to applicable laws and regulations, as well as changes in industry standards or other relevant factors. Depending on the industry or organization, this could be done annually or every few years. Additionally, it is important to review the charter whenever there are any changes in personnel or when new policies are implemented that may affect the way confidential information is handled.

Q: What are some best practices when drafting a Comprehensive Disclosure Committee Charter?

Asked by Emma on March 16th, 2022.
A: When drafting a Comprehensive Disclosure Committee Charter it is important to consider all applicable laws and regulations in order to ensure that they are properly addressed in the charter. Additionally, it is important to consider industry standards and best practices that may apply to the organization’s particular sector or business model (e.g., SaaS providers or B2B companies). It is also important to ensure that there are provisions for protecting confidential information from being shared with third parties without permission, as well as procedures for responding to security breaches in a timely manner. Lastly, it is important to make sure that personnel roles and responsibilities are clearly defined within the charter so that everyone involved knows their duties and obligations when handling confidential information.

Q: How does a Comprehensive Disclosure Committee Charter differ between UK vs USA vs EU jurisdictions and laws?

Asked by John on December 12th, 2022.
A: The exact details of a Comprehensive Disclosure Committee Charter may differ depending on jurisdiction due to different laws and regulations that may apply in each country or region. For example, while both the UK and USA have strict data protection laws such as GDPR (General Data Protection Regulation) in place, there may be differences between their implementation or interpretation of certain aspects (such as data subject rights). Additionally, different countries may have different requirements regarding how long certain records must be kept or what constitutes a valid consent agreement when handling confidential information. Therefore it is important to take into consideration all applicable laws when drafting a Comprehensive Disclosure Committee Charter so that it complies with each jurisdiction’s specific requirements.

Q: What legal ramifications would I face if I fail to draft a comprehensive disclosure committee charter?

Asked by Joseph on June 11th, 2022.
A: Failing to draft a comprehensive disclosure committee charter could have serious legal ramifications depending on jurisdiction and industry standards. Without a comprehensive disclosure committee charter in place, an organization may not have sufficient procedures for handling confidential information properly, which could lead to potential violations of data protection laws such as GDPR (General Data Protection Regulation). This could result in hefty fines or other legal repercussions depending on the nature of the violation and how serious it was deemed by regulatory authorities. Furthermore, failure to comply with industry standards regarding how confidential information should be handled can also lead to reputational damage for an organization if this behavior becomes public knowledge.

Example dispute

Lawsuit for Breach of Disclosure Committee Charter

• Plaintiff may raise a lawsuit against a company for breach of the disclosure committee charter if the company has failed to provide investors with accurate, timely information in accordance with the charter.
• The plaintiff must demonstrate that the company’s failure to provide accurate information has caused them financial harm.
• The plaintiff must also demonstrate that the company has breached its legal obligations under the disclosure committee charter and any other applicable legislation or regulations.
• The court may award damages to the plaintiff in the form of monetary compensation for the financial losses suffered as a result of the breach.
• The court may also order the company to comply with its disclosure committee charter in the future and provide accurate, timely information to its investors, as required by law.

Templates available (free to use)

Disclosure Committee Charter

‍