On Thursday, in addition to voting to issue a new rule proposal regarding changes to MD&A and
other financial disclosure requirements (see
this PubCo post), the SEC also issued new companion guidance on the disclosure of key performance
indicators and other metrics in MD&A. There has been an
increase in investor interest in disclosure of KPIs and similar
metrics, as part of MD&A and especially outside of MD&A,
for example, in connection with sustainability reporting. (See
this PubCo post.) Although the SEC's guidance applies
specifically in the context of MD&A, companies may want to take
the guidance into account in other contexts as well.
What is a KPI? In general, a KPI is a quantitative
measure used to demonstrate performance of a business or
operational objective. To the extent that these factors are
material to an understanding of MD&A, the SEC believes that
they should be disclosed:
