Our review of all 1300+ Form SD and CMR filings continues. At this time, 400 full reviews are complete, along with another 130 partially completed. Very soon we will be announcing the participation of a prestigious law school in the study as well.
But yesterday, something struck me as I prepared to be interviewed by our friend Broc Romanek of TheCorporateCounsel.net.
I compared a couple findings from our sample of 400 to certain predictions in the Tulane University/Payson Center October 2011 cost analysis submitted to the SEC during the proposal stage of the conflict minerals disclosure requirements. The study (along with NAM’s cost study) was viewed by the SEC as “the most useful framework for considering costs” (p. 302 of the Final Release) and has been widely acknowledged for its impartiality and credibility.
I found that:
- Tulane’s estimate of “large company” issuers (those with annual revenues greater than $100 million) was very close to the actual number of filers. The University’s prediction was 1,678 compared to 1,308 actual*.
- Regarding the number of impacted direct suppliers, Tulane essentially hit the bullseye – a predicted average of 1,060 relevant suppliers per filer as compared to an actual average of 1,126 suppliers per filer from our sample**.
Remember that there were no solid precedents or benchmarks for the University to use (the study references other studies using predictions, although some used actual survey results as a foundation). Even the Final Release commented “none of the studies have provided compelling explanations for the precise dynamics that will govern the issuer-supplier or first-tier-second-tier suppler relationships.” P. 307
There are likely other aspects of the Tulane study that will be validated by a broader retrospective analysis.
Tulane is currently conducted a post-filing survey to gather information on actual costs and benefits that resulted from Dodd-Frank 1502 compliance efforts. Participation in the study is being supported by most industry groups. We highly recommend participating. Survey details are here.
After reviewing this background information, contact Dr. Chris Bayer (email@example.com) to get the link to the survey itself and the password.
* We are attempting to cross reference the list of filers with their reported annual revenues to determine how many of the 1308 filers are “large companies”.
** Of our total sample, 168 filers provided numbers of affected suppliers. Interestingly, the SEC commented in the final release that “we believe the total number of suppliers affected in the university group commentator’s analysis is likely to be too high.” P. 308