Governance: Krispy Kreme filing cited for its details.

An 8-K filing by beleaguered Krispy Kreme Doughnuts Inc. in August was striking in the amount of information it offered and a testament to the way disclosure has changed since the Sarbanes-Oxley Act, says Dr. C. Warren Neel, executive director of the Corporate Governance Center at the University of Tennessee.

Krispy Kreme issued the filing and a press release related to a report to the company's board by a special committee. The panel was charged with reviewing the company's financial statement adjustments, recent operating results, liquidity and capital resources and material weaknesses in internal control over financial reporting.

The franchise doughnut firm, based in Winston-Salem, N.C., was walloped last year and earlier this year with charges of accounting fraud and inflated earnings reports. Its CEO and founder and other top executives resigned, and restructuring expert Stephen Cooper was recruited as its new CEO. The board then formed a committee to investigate the company's health and the source of the problems.

"In reading the filing, I was both amused and somewhat shocked that all of this was put in the form of an 8-K," says Neel. "It would appear that if I were a plaintiff's attorney, I could say, 'Hey guys, we don't have to worry about spending all this money on due diligence. We've got the 8-K.'" If the company elected to disgorge all these details in a filing, he adds, "someone must have had to make a judgment call" to do so, weighing the obligation to disclosure against the potential harm to shareholders.

"A decade ago," he adds, "you would have seen far less, maybe a summary about the report, but it would have been handled internally."

For the newly appointed board members, Neel says, "The challenge is, who do you represent? Do you represent the shareholders, or the regulatory bodies? We've got a regulatory environment that is onerous, and I sometimes worry that shareholders pay a dear price."