The case against weakening quarterly reporting

Short-termism is real. Quarterly reporting is not the cause.

On 5 May 2026, the SEC proposed rule amendments that would allow public companies to file semi-annual reports on a new Form 10-S in lieu of quarterly reports on Form 10-Q. The proposal, which SEC Chair Atkins has framed as part of his agenda to make the public company model more attractive, is the culmination of a sustained push: FCLTGlobal’s advocacy for greater reporting flexibility, the Long-Term Stock Exchange’s formal petition, President Trump’s public call for semi-annual reporting, and similar arguments from Norges Bank Investment Management. What was advocacy is now a proposed rule. Comments are due by July 2026.

I find the case unpersuasive. It was unpersuasive when it was advocacy, and the fact that it is now a formal proposal does not change the underlying analysis.

That is not because short-termism is unreal. It is real. Nor is it because reporting practice is irrelevant. It plainly matters. The problem is that the current reform agenda overstates the role of reporting frequency and understates the importance of the surrounding behaviours that actually create short-term pressure in capital markets.

The evidence does not support the conclusion

FCLTGlobal’s current position sits uneasily with its own earlier analysis. In its 2019 submission to the SEC, the organisation stated explicitly that forward-looking earnings guidance, rather than quarterly reporting, was the primary driver of short-termism. Optional semi-annual reporting appeared in that submission only as a minor, conditional recommendation, hedged with conditions – notably that companies moving to half-yearly reporting should face a higher bar for interim disclosure of material information.

No new evidence has since emerged that would justify promoting that minor option to the centre of the reform agenda. What has changed is not the analysis. It is the political environment. That earlier, more cautious position remains the stronger one.

The mechanisms of short-termism are behavioural, not structural

The key issue is not how often companies report. The key issue is what boards, executives, analysts, and investors choose to do around the reporting cycle. Short-termism is driven not only, and perhaps not mainly, by the existence of quarterly reports. It is driven by the market’s obsession with the gap between reported numbers and consensus expectations, by the managerial habit of steering towards those expectations, by the choreography of pre-close interaction, and by presentations that place disproportionate weight on one quarter’s profit rather than on the company’s underlying capacity to create value over time.

If quarterly EPS guidance and similar practices are an important source of pressure – as FCLTGlobal’s own earlier analysis argued at length – then the case for targeting the reporting frequency itself becomes weaker. The more convincing reform agenda would focus first on guidance practices, market signalling, and the way companies structure investor dialogue.

Quarterly reporting regularises information asymmetry

There is a transparency argument that should not be brushed aside. Regular quarterly reporting is not merely an administrative burden. It is a mechanism for reducing information asymmetry on a recurring basis. A weaker formal reporting rhythm does not remove information demand. It simply increases the importance of inference, selective interpretation, and private analytical advantage – benefiting those with access to expensive alternative data and sophisticated information-gathering at the expense of ordinary investors.

There is a further dimension to this transparency argument that the current debate has largely overlooked. Information asymmetry between a company and its investors does not remain static between reporting dates – it accumulates. Quarterly reporting performs a regularising function: it equalises the information base between company and market before asymmetries reach the threshold of inside information. Without that rhythm, companies must find other mechanisms to achieve the same effect, or risk repeatedly finding themselves in possession of material non-public information that triggers disclosure obligations under securities law. This is not a trivial operational problem. Those who advocate less frequent reporting owe a clearer answer to it than the current debate provides.

Three behavioural changes that would make a material difference

The obvious objection to behavioural reform is that it has been advocated for years without much result. If companies could simply choose better behaviours, why haven’t they? It is a fair challenge. But the answer is not to abandon the transparency mechanism. It is to address the incentives more directly: through compensation structures that reduce the reward for short-term earnings management, through governance reform that gives boards clearer accountability for long-term value, and through investor stewardship that stops reinforcing the quarterly game. These are harder levers to pull than a rule change, but they target the actual mechanisms rather than a visible but secondary symptom.

There are three specific changes that would make a material difference, and they apply equally whether a company reports quarterly or half-yearly.

First, companies should reconsider the practice of collecting, circulating, and redistributing analysts’ estimates. The practice is understandable – it helps management track how the company is running against expectations, and it is often seen as a service to analysts. But it also reinforces exactly the dynamic that drives short-termism, both inside the company and among the analysts themselves.

Second, companies should reform or abandon pre-close interaction with analysts. It has become common to arrange calls before entering the silent period, ostensibly to reduce the risk of analysts missing important information. But unless every market participant is invited to the same meeting, with a standardised agenda, publicly available materials only, and no questions taken, such calls open the door to preferential disclosure and to herding analysts towards consensus numbers through selective emphasis, tone, and nuance. One cleaner alternative is a standardised pre-silent newsletter, which provides the informational service without the risks.

Third, companies should restructure their results presentations so that long-term value creation receives more attention than the period’s profit. Most listed companies have an equity story – a framework explaining how they create value over time, built around identified value drivers and key performance indicators. Results presentations that place that framework at the centre naturally direct attention towards long-term performance and dampen the short-term impulse. This is a choice available to every company today, regardless of what the SEC ultimately decides.

Reform without retreat

If the objective is to modernise the reporting framework, there are sensible ways of doing so that stop well short of making quarterly reporting optional. Regulators could streamline duplication between earnings releases and periodic filings, allow more cumulative or trailing twelve-month presentation, and improve the format and usability of disclosure. These reforms would reduce short-term noise without eliminating reporting discipline.

The compliance cost argument has some merit, but it is narrow. Quarterly reporting falls disproportionately on smaller issuers. A tiered approach – maintaining full quarterly requirements for large-cap companies while offering greater flexibility to smaller ones – deserves serious consideration on those grounds alone. But that is a targeted administrative argument, not a systemic case against quarterly reporting as such.

Why this matters for investor relations

The quarterly reporting debate is, at bottom, a debate about the relationship between a company and its investors. Those who want to weaken quarterly reporting argue that the current rhythm creates dysfunctional pressure. They are right about the pressure, but wrong about the cause. The pressure comes from what companies, analysts, and investors do around the reporting cycle, not from the cycle itself.

Investor relations, properly understood, is a relational discipline – it exists to build and maintain the quality of the dialogue between a company and its owners. Quarterly reporting is the most important recurring occasion for that dialogue. Weakening it does not improve the relationship. It reduces the frequency of the only structured, public, and auditable moment at which the company and its investors must confront the same set of facts. What is needed is not less reporting, but better use of the reporting that exists – presentations that emphasise value creation over earnings surprises, engagement that is genuinely two-way, and a market culture that rewards long-term thinking rather than quarterly precision.

Short-termism is real, and the SEC’s proposal means reform is no longer hypothetical. But the answer remains narrower and more practical than the proposal suggests: reform the behaviours that make quarterly reporting short-termist, and where the reporting framework itself needs updating, do so in ways that preserve rather than erode the transparency that markets depend on.

My thinking on corporate communications is laid out here: www.jorgenchristiansen.no/how