Our Process

SASB’s approach to determining materiality for the purposes of standard-setting is informed by the provisions of the federal securities laws and the regulations of the Securities and Exchange Commission (“SEC”), including in particular Regulation S-K; opinions of the U.S. Supreme Court; and interpretations and guidance issued by the SEC.

 

Together with robust vetting and verification, this is a conservative and rigorous approach. Specifically, SASB’s standard-setting process is evidence-based, market-informed, and validated through research and quantitative analysis focused on determining whether performance on a given topic would affect the financial condition and operating performance of the company, and thereby be reasonably likely to affect the investment or voting decision of a reasonable investor.

 

With this process, SASB is able to identify topics that are reasonably likely to be material to investors and therefore warrant inclusion as a topic for standardized disclosure, and thereby improve the decision-usefulness of information contained in SEC filings (such as Forms 10-K and 20-F). The following diagram outlines the steps in SASB’s process.

 

For a more detailed description, please view our staff bulletin entitled Approach to Materiality & Standards Development – Staff Bulletin.

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