Perfecting web design for your clients is not easy in any situation. However, when developing websites for publicly traded businesses, the challenges of web design are unique. Because publicly traded companies have multiple owners from the public, they are privy to a lot of scrutiny and compliance rules.
The Securities & Exchange Commission (SEC) has especially enforced these rules to eliminate embezzlement & give full disclosure to public investors. Compliance requirements allow these companies to trade transparently.
Public companies need to maintain a department for managing investors separately, called ‘Investor Relations,’ which makes web design difficult for web developers and designers. In this article, we will discuss X web design challenges while developing publicly traded business websites.
Risk of Heavy Fines
The SEC has issued rigid guidelines for all publicly traded companies. Unless web designers ensure the company website is compliant with SEC guidelines, the companies may be subjected to heavy fines costing thousands of dollars. Many publicly traded websites are subject to these fines, and in 2018 alone, SEC managed to collect up to $4 billion in fines.
Pull SEC Filings
The Sarbanes-Oxley Act of 2002 dictates publicly-traded business websites to host Section 16 filings on the IR website at the end of every business day. These companies also have to file forms 3, 4, and 5 with the SEC.
Although it’s possible to link the business website with SEC’s website to extract this data and simplify the updating process, doing so can degrade the user experience. As companies need to keep these filings posted for one year, at least, designers must develop a separate archive for storing previous filings and maintaining relevant information.
Apart from that, a publicly traded business website needs to post the company’s annual and quarterly filings in-sync with its filing process with the SEC. Ensuring these updates are posted on the website in a timely manner mandatory for SEC compliance.
Extract Filing Non-GAAP Financials
According to the SEC, it’s essential for publicly traded businesses to make non-GAAP financial measures consistent with GAAP measures. This is why publicly traded company’s web design needs to extract and display that information through audio recordings, press releases, and SEC files on their IR website.
Apart from these reporting requirements, web designers need to consider XBLR filing requirements on the website, as well. All this financial information is not only complex but also difficult to sort and organize. Web designers have to consistently leverage filtering and sorting tools to manage this information and optimize the user experience.
Extracting Corporate Governance Information
Corporate governance policies can also influence the financial decisions of public investors. This is why the Sarbanes-Oxley Act enforces public companies to display corporate governance updates on the website. In other words, web designers are bound to develop a clear sub-section for meeting SEC guidelines related to corporate governance.
Managing Proxy Materials and Cookies
Public companies must post proxy materials on the IR website. Therefore, the website hosts documents such as letters to shareholders, annual shareholder meeting invitations, and, most importantly, annual reports.
Publicly traded companies are subjected to heavy scrutiny to ensure transparency for investors. However, by incorporating compliance requirements in your web design, you can save your client from heavy fines and penalties from SEC.