How to Present the Management Section: Building Credibility Through Team Background Disclosure

The SEC’s Division of Corporation Finance has, since late 2024, increased the frequency of Staff comments specifically targeting the biographical disclosures of directors and executive officers in F-1 registration statements. Analysis of comment letters filed on EDGAR between Q3 2024 and Q1 2025 shows a 40% year-on-year increase in requests for clarification regarding the “specific experience, qualifications, attributes, or skills” that qualify an individual to serve on a particular board or hold a specific C-suite role, as required under Item 401(e) of Regulation S-K. For issuers pursuing a NASDAQ listing under the streamlined rules for companies listing via a de-SPAC transaction, the scrutiny is even higher, as the combined entity must satisfy NASDAQ Listing Rule 5605’s independent director and committee requirements immediately upon closing. A management section that reads as a generic recitation of past titles — without a clear narrative thread connecting each individual’s career to the issuer’s stated business strategy and risk profile — is now the single most common reason for a second round of SEC comments, delaying the effective date of the registration statement by an average of 45 days.

The Regulatory Framework: Item 401(e) and the SEC’s 2024 Guidance Shift

The foundation for management disclosure in a US IPO registration statement is Item 401(e) of Regulation S-K, which requires a brief description of the business experience of each director, executive officer, and significant employee during the past five years. The SEC’s 2024 Compliance and Disclosure Interpretations (C&DIs) clarified that “brief” does not mean “superficial.” The Staff now expects issuers to explain why a candidate’s prior role at a specific company — not just the industry — is relevant to the issuer’s current operations.

The “Five-Year Rule” is a floor, not a ceiling. While Item 401(e) technically only mandates disclosure for the preceding five years, the SEC has consistently pushed for earlier career highlights when those roles are demonstrably relevant to the issuer’s current business. For a biotech firm listing on NASDAQ, a CEO’s role at a major pharmaceutical company 15 years ago is arguably more material than a recent stint at a distressed startup. The SEC’s 2024 C&DIs explicitly state that issuers should “consider whether a director’s or officer’s earlier experience is necessary to an understanding of his or her qualifications,” effectively overriding any mechanical application of the five-year limit.

The SEC’s 2024 Guidance on “Specific Experience.” In a series of Staff Legal Bulletins issued in late 2024, the SEC emphasized that boilerplate language — such as “has extensive experience in the technology sector” — is insufficient. The Staff now requires a direct link between a specific skill set and the issuer’s business model. For example, a CFO with prior experience at a company that was acquired via a stock-for-stock merger should disclose that experience explicitly if the issuer is pursuing a roll-up strategy. This guidance directly impacts the drafting of the “Experience, Qualifications, Attributes, and Skills” table often included in proxy statements and, increasingly, in F-1 registration statements for IPOs.

Structuring the Management Section: From Biographical Chronology to Strategic Narrative

The traditional approach — a chronological list of past employers, titles, and dates — is no longer sufficient. The SEC’s focus on “qualifications” has shifted the burden onto the issuer to demonstrate that the management team is not merely competent, but specifically suited to execute the business plan described in the prospectus.

The “Relevance Matrix” Approach

Leading US securities law firms, including Skadden and Davis Polk, now advise clients to construct a “relevance matrix” before drafting the management section. This matrix maps each director and officer’s key professional achievements against the issuer’s stated risk factors and business milestones.

Step 1: Identify the issuer’s top three execution risks. For a pre-revenue biotech, these might be: (i) FDA approval pathway, (ii) manufacturing scale-up, and (iii) partnership negotiation. For a fintech company, they might be: (i) regulatory compliance across multiple jurisdictions, (ii) cybersecurity, and (iii) capital allocation.
Step 2: For each executive, identify specific career moments that directly address these risks. A CEO who previously led a company through a successful FDA Advisory Committee meeting should state that explicitly. A CFO who restructured debt during a liquidity crisis should highlight that experience if the issuer has a leveraged balance sheet.
Step 3: Draft the biographical paragraph to lead with the most relevant qualification, not the most recent title. The first sentence of each biography should answer the question: “Why is this person the right person for this role at this company at this time?”

Addressing Gaps and Red Flags Proactively

The SEC will identify gaps. A management team with no prior public company experience is a red flag for NASDAQ, which requires a majority of independent directors and fully independent audit, compensation, and nominating committees under Listing Rule 5605.

Prior public company experience: If a CEO has never managed a public company, the issuer should disclose the specific support structures in place — such as a seasoned CFO with public company experience, or a board member who previously served as an audit committee chair for a listed entity.
Regulatory or legal history: Item 401(f) of Regulation S-K requires disclosure of certain legal proceedings involving directors and officers. The SEC’s 2024 guidance emphasized that a “no” answer to the Item 401(f) checkboxes is not sufficient if the issuer has knowledge of pending investigations. Any material litigation, even if not yet resulting in a conviction or settlement, should be disclosed if it is reasonably likely to affect the individual’s ability to serve.
Time commitment: NASDAQ Listing Rule 5605(b)(3) requires that each director have sufficient time to discharge their duties. If a director serves on more than three public company boards, the issuer should include a statement explaining how that individual will allocate time effectively, or risk a Staff comment on director overboarding.

The De-SPAC Dynamic: Enhanced Scrutiny on Management Continuity

For issuers pursuing a NASDAQ listing via a business combination with a special purpose acquisition company, the management section of the proxy statement/prospectus (the S-4 or F-4) faces additional layers of scrutiny. The SEC’s 2024 amendments to Rule 14a-101 (Schedule 14A) now require explicit disclosure of how the target company’s management was selected, and whether any members of the SPAC’s sponsor team will remain on the combined company’s board.

The “Sponsor Overhang” Issue. The SEC has flagged instances where SPAC sponsors retained board seats or management roles despite having no relevant industry experience. In a series of comment letters from Q4 2024, the Staff asked issuers to explain the specific qualifications of sponsor-appointed directors, and whether those individuals had any prior experience in the target’s industry. The response must be substantive — “the sponsor’s team has extensive experience in evaluating businesses” is no longer acceptable.

Executive Compensation Disclosure in De-SPACs. The SEC’s 2024 amendments to Item 402 of Regulation S-K, specifically the new rules on “golden parachute” compensation, require detailed tabular disclosure of all payments to named executive officers in connection with the de-SPAC transaction. This includes not just cash bonuses, but also the value of equity awards that vest upon the closing of the business combination. The management section must cross-reference this compensation disclosure, explaining how the compensation structure aligns with shareholder interests — a direct response to the SEC’s stated concern about misaligned incentives in the SPAC market.

Practical Drafting Techniques: Language, Structure, and Compliance

The management section is not a marketing document. It is a legal disclosure that must satisfy the SEC’s anti-fraud provisions under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. Every statement must be supportable by objective facts.

Avoiding “Puffery” in Biographical Descriptions

The SEC’s 2024 C&DIs explicitly warned against the use of subjective superlatives. Phrases like “industry-leading,” “visionary leader,” or “unparalleled expertise” are red flags. Instead, use specific, verifiable language:

Weak: “Mr. Chen is a visionary leader with deep expertise in cross-border e-commerce.”
Strong: “Mr. Chen served as Chief Operating Officer of XYZ Ltd. from 2018 to 2023, during which the company’s cross-border revenue grew from USD 50 million to USD 400 million, and the company expanded operations into 12 new jurisdictions across Southeast Asia.”

The second sentence provides a measurable outcome (revenue growth) and a specific scope (12 new jurisdictions). It allows the reader — and the SEC Staff — to independently assess the individual’s qualifications.

The “Specific Experience” Table

For issuers with a large board or complex management team, a “Specific Experience” table — similar to the matrix used in proxy statements under Item 407(h) of Regulation S-K — can be included in the F-1. This table maps each director’s skills (e.g., “International Operations,” “M&A,” “Regulatory Compliance”) against the issuer’s strategic priorities. While not mandatory for an IPO registration statement, its inclusion has been shown to reduce the number of SEC comments on the management section by approximately 30%, based on an analysis of F-1 filings from January to June 2024.

Cross-Border Considerations for Hong Kong-Based Issuers

For a Hong Kong company listing on NASDAQ via an F-1, the management section must address the unique regulatory and cultural context.

Listing Rule 3.09 vs. NASDAQ independence: A director who meets the HKEX independence requirements under Listing Rule 3.09 may not automatically satisfy NASDAQ’s independence standards under Listing Rule 5605(a)(2). The issuer must explicitly state that each director has been determined to be independent under NASDAQ’s standards, not just HKEX’s.
BVI or Cayman corporate structure: If the issuer is incorporated in the Cayman Islands or BVI, the management section should disclose the legal framework under which directors owe fiduciary duties. The SEC has asked for clarification on whether directors are subject to the same duties of care and loyalty under Cayman law as under Delaware law, particularly in the context of a de-SPAC where shareholder litigation is more likely.
PRC regulatory approvals: For issuers with operations in the PRC, the management section must disclose any material regulatory approvals required for the directors to serve, particularly under the 2023 PRC Cybersecurity Review Measures and the 2024 Data Security Management Measures. If a director is a PRC national, the issuer should confirm that the individual is not subject to any travel restrictions or other impediments that would prevent them from attending board meetings in the United States.

Actionable Takeaways

Lead each biography with the single most relevant qualification for the issuer’s current business strategy, not the most recent job title, and support every claim with a specific, measurable outcome.
Proactively disclose any gaps in public company experience, regulatory history, or time commitment, and explain the specific support structures or board composition that mitigate those gaps.
Construct a “Relevance Matrix” mapping each director’s skills to the issuer’s top three execution risks, and include a “Specific Experience” table in the F-1 to preempt SEC comments on Item 401(e).
For de-SPAC transactions, ensure the management section explicitly addresses the qualifications of sponsor-appointed directors and cross-references the golden parachute compensation disclosure required under the SEC’s 2024 amendments.
For Hong Kong or PRC-based issuers, confirm that each director’s independence is assessed under NASDAQ’s standards, not HKEX’s, and disclose any PRC regulatory approvals or travel restrictions that could affect board service.