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After public outcry over the management, or mismanagement, of companies that have cost taxpayers while enriching its executives and directors, the SEC is expanding disclosure on who is in charge, what qualifies a board member, how directors are overseeing risks, and how they are being paid.

The goal of the SEC is to give investors more information for evaluating the leadership of a company and for valuing its stocks. But it will be a full year before the additional information is available, since the agency’s Expanded Proxy Disclosure Requirements passed on December 16 won’t kick in for proxy statements, annual reports, and registration statements until February, 2010.

Here are some of the investor concerns that the new disclosure requirements attempt to address:

• Do your compensation policies create a risk?

Specifically, you’ll be able to read a narrative discussion of large company’s compensation policies for all employees in general – not just the top executive officers – but ONLY IF these policies are reasonably likely to create a potential adverse effect on the company. [We’re thinking big bonus structures here; however, it would be pretty easy to argue that they don’t harm a company.]

• What is the value of stock and stock option awards?

Companies already have to report the dollar value of awards granted to named executives and directors, but going forward, they now must disclose the aggregate date fair value of all equity-based grants during the fiscal year. And going backwards, they have to re-compute the value of the stocks and stock options given to any named executive or director for all previous years. That will give investors a fuller picture of total compensation; especially since companies also have to clarify that performance-based equity awards should be valued on the probable versus maximum value of the award (which still needs to be included in a footnote).

• What qualifies your directors?

There will be more information, in an expanded narrative, about how each director (or nominee) qualifies to be on the board; other board positions they hold or have held during the last five years; and any relevant legal proceedings during the last ten years.

• How does your board manage risk?

“Aren’t the directors the ones who are supposed to be minding the shop?” That’s a question we heard al lot last year, as even CEO’s were caught unawares at the beginning of the mortgage crisis. The expanded proxy disclosure requirements will give the public more information on a company’s leadership structure, including whether the CEO and the Chairman of the Board are separate positions, why, and what roles they play in leading the company. What role does it have in risk oversight?

• What do you pay your compensation consultants?

A great deal of criticism this year has been directed at the way compensation consultants are hired to recommend enormous packages, which the board approves for themselves. The new SEC rules seek to determine if there are potential conflicts of interest of compensation consultants, and require companies to disclose what these consultants are paid – but only in certain circumstances.

• More diversity is encouraged.

Lack of diversity among the board members has been blamed for insular thinking and “scratch my back I’ll scratch yours” decisions. We assume this is why the expanded SEC rules say more about the nominating process and whether a company considers diversity. Companies that have such a policy, even if they don’t define “diversity”) need to explain how it is being implemented and whether it is effective.

[This may become an exercise in creative writing, but we applaud the suggestion that the issue is at least considered.]

We’ve just included the highlights here, but you can read the official SEC’s expanded Proxy Disclosure Requirements, along with their guidelines to help companies follow the new rules.

It is well worth noting the dissention expressed by SEC Commissioner Kathleen L. Casey, who found some of the new rules to be overly burdensome, or are not likely to result in the kind of information that can really help investors, or could result simply in “boilerplate” responses from reporting companies.