It takes a lot to get buttoned-down corporate counselors up in arms. But Susan Hackett, general counsel for the Association of Corporate Counsel (ACC), says the Financial Accounting Standards Board (FASB) managed to do just that with its revised proposal on disclosing legal contingencies. Back in 2008, FASB issued an initial proposal that would have required public companies to report dollar amounts for all pending lawsuits. Concerned such disclosures would telegraph a company's strategy on lawsuits, corporate counsels and lobbyists convinced FASB to revise the proposal.
What came back was not much better, critics say. The rule still requires companies to assign a dollar value to outstanding legal claims, but it allows them to aggregate those amounts into various categories.
Within a week of the proposed rule's publication, corporate counsel from 100 Fortune 1000 companies had signed a letter of objection drawn up by the ACC, Hackett says. "That's amazing, especially for a group of people who generally like to keep their heads down and their companies' names out of the limelight."
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