5 Web Design Challenges for Creating Websites for Publicly Traded Businesses
Designing websites for your clients is never easy, but when it comes to publicly traded businesses, things become even more complex. Since publicly traded companies have multiple owners from the public, government authorities subject them to considerable scrutiny and these businesses must fulfill several compliance rules.
Rules issued by the Securities & Exchange Commission (SEC) help prevent embezzlement of public investments and allow public investors to have full disclosure. In other words, these compliance requirements ensure that publicly traded companies operate transparently.
That said, these rules also make web design development difficult. In this article, we will discuss 5 web design challenges you will face while creating publicly traded business websites.
Risk of Heavy Fines
The SEC has set up strict guidelines for all publicly traded businesses. Therefore, web designers must incorporate all SEC guidelines during development, else their client will face fines costing thousands of dollars. In 2018 alone, publicly-traded websites were subject to as much $4 billion in fines by the SEC.
Pull SEC Filings
Public companies must maintain a department for managing investors separately, called ‘Investor Relations.’ The Sarbanes-Oxley Act of 2002 tells publicly-traded business websites that they must host Section 16 filings on the Investor Relations website.
Not only do they have to submit this at the end of every business day, but at the same time, they must file forms 3, 4, and 5 with the SEC. Extracting this data from the business websites is not easy. While you can link your website with SEC’s website and simplify the updating process, it messes up the user experience.
Additionally, because companies must keep having filings posted for at least one year, designers have to create a separate archive where they can store old filings and maintain relevant information.
Lastly, publicly-traded business websites need to post the company’s annual and quarterly filings regularly. These updates must be in-sync with the company’s filing process with the SEC. Unless the developer can create a system for posting these updates on time, the website will transgress SEC compliance.
Extract Filing Non-GAAP Financials
SEC dictates to make GAAP and non-GAAP financial measures consistent with each other. This is why web designers must extract and display information from press releases, audio recordings, & SEC, and then display them on their IR website.
Moreover, web designers must fulfill 5BLR filing requirements as well. Since all financial information is complex and difficult to sort and organize, web designers must consistently use various sorting & filtering tools to structure information and optimize the user experience.
Extracting Corporate Governance Information
Corporate governance policies influence the most critical financial decisions of public investors. Unsurprisingly, the Sarbanes-Oxley Act makes it mandatory for publicly traded companies to update corporate governance policy on the website. This means web designers must develop a clear sub-section to meet the SEC requirements.
Managing Proxy Materials and Cookies
Public company websites must post proxy documents and other materials on the IR website. Therefore, it hosts documents such as annual shareholder meeting invitations, importantly annual reports, and letters to shareholders.
All important information must be stored in an easily accessible manner. Web designers must ensure that these documents are stored and hosted in an easily readable, searchable, and printable format.
This is why all documents and other proxy material have to be stored in PDF files in the IR section. Lastly, web designers cannot use Cookies due to the limitations set by the SEC.
SEC puts publicly traded companies under heavy scrutiny to make sure they are transparent for public investors. However, SEC can still penalize your company if you don’t display relevant information because of a design flaw. While these rules make web design challenging for developers, an experienced web designer can save you from heavy fines and penalties.