President Donald Trump has reignited a debate over the frequency of financial reporting by American public companies.
On Monday, he proposed a shift from the current quarterly earnings reports to a biannual schedule. This suggestion, which he shared on Truth Social, aims to alleviate the burden on companies and allow management to concentrate on long-term strategies rather than short-term gains.
"Subject to SEC Approval, Companies and Corporations should no longer be forced to Report on a quarterly basis (Quarterly Reporting!), but rather to Report on a Six (6) Month Basis. This will save money, and allow managers to focus on properly running their companies," Trump stated.
He further criticized the current system by contrasting it with China's long-term management approach, saying, "Did you ever hear the statement that, China has a 50 to 100 year view on management of a company, whereas we run our companies on a quarterly basis??? Not good!!!"
As reported by Breitbart, this is not the first time President Trump has broached this topic; he previously suggested such a change during his tenure in office.
The proposal, if implemented, would mark a significant shift in U.S. business practices, aligning them more closely with international standards where less frequent reporting is common. However, this change hinges on the approval of the Securities and Exchange Commission (SEC), which has mandated quarterly reporting since 1970.
The current system is deeply ingrained in Wall Street's operations, with investors relying on quarterly results to gauge a company's financial health. Earnings calls following these reports provide a platform for investors to engage with company executives, scrutinizing their decisions and strategies.
This potential shift raises questions about the balance between regulatory oversight and corporate autonomy, as well as the implications for investor transparency and market stability.
Login