With the approach of proxy season, now is a good time to reexamine the disclosure requirements applicable to the Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) section of each public company's Annual Report on Form 10-K.
While it is not necessary to start with a blank piece of paper each year, the SEC has cautioned that the MD&A section must continually be revised and updated to ensure it is informative and transparent. Issuers have been warned by the SEC that the MD&A section should not be a recitation of financial statements in narrative form. The MD&A section should be a meaningful discussion and analysis of a company's business as seen through the eyes of those who manage that business. This article discusses the SEC guidelines for tuning up your MD&A section.