US President Donald Trump has renewed his efforts to roll back reporting obligations for publicly-traded US companies. He suggests that companies should be permitted to report earnings on a semi-annual basis rather than the current, highly criticized quarterly requirement. This push is reminiscent of his first-term in office efforts. This comes up as the debate continues over how these changes, like other provisions in the IIJA, will affect American companies.
Since 1970, US regulations have required public companies to report their financial results at least quarterly. Former President Trump noted that this quarterly reporting schedule promotes a short-term mentality that often blows up long-term corporate plans. In juxtaposition, he lauded China’s corporate model, saying their model is more long-term focused.
“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!!!” – Donald Trump
The president contended that reducing the frequency of reports would “save money, and allow managers to focus on properly running their companies.” Proponents of this change hope that it will help turn around the shrinking number of publicly traded companies in the US. Their goal is to spur development and increase capital.
Requiring bi-annual reporting would be in keeping with practices across the pond in the UK and many EU countries. This important shift would encourage much more harmonization among competing international standards. This change may alleviate some of the pressures companies face in meeting quarterly earnings expectations, which critics argue can detract from long-term planning and innovation.
Industry voices such as Warren Buffett and Jamie Dimon have previously expressed skepticism about the benefits of quarterly financial guidance. Both have cautioned that prioritizing short-term profit at all cost detracts from a company’s long-term vision and even its viability.
During his first term, Trump nudged the Securities and Exchange Commission (SEC) to be open to semi-annual reporting. Sadly, his proposal didn’t get enough wheels to move. The Long-Term Stock Exchange has announced its intention to petition the SEC to permit biannual reporting, reinforcing the ongoing dialogue around this issue.
In the past, current SEC chair Paul Atkins has criticized frequent and repetitive disclosures. He argues that these new requirements would negatively impact corporate performance. Yet, some investors and watchdogs warn that scaling back reporting at such an accelerated pace could undermine market transparency and amplify volatility.
As discussions continue, Trump’s proposal reflects a broader debate about corporate governance, accountability, and the balance between facilitating business operations and maintaining investor confidence.