Trump’s call to end corporate quarterly reporting mandates would boost competitiveness, end onerous regulation

President Trump today used a social media post to call on the SEC to end quarterly reporting mandates for publicly traded companies and instead move to a semi-annual schedule. CEI financial policy expert John Berlau agrees that this reform would help American companies look for long-term success:

“Here’s a headline for The Onion, Babylon Bee, or anyone else with a sense of irony and an interest in good public policy: ‘Trump posts Truth Social statement internationally uncontroversial, wins accolades from government leaders worldwide.’

“President Trump’s (real life) Truth Social post concerns the U.S.’s unique – – and uniquely destructive – – quarterly reporting mandates for public companies on U.S stock exchanges. Trump today declares that ‘subject to SEC [Securities and Exchange Commission] 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’. He explains that, ‘This will save money, and allow managers to focus on properly running their companies.’

“This policy would align the U.S. with the corporate governance rules of the rest of the world, make U.S. firms more globally competitive, and curb the short-termism of U.S. corporate culture that has been decried by both parties.

“Both the European Union and the post-Brexit United Kingdom have ended quarterly reporting requirements and instead require the less burdensome semi-annual reporting, just as Trump now proposes. As I wrote in a USA Today op-ed, ‘international comparisons show that quarterly reporting requirements not only tend to decrease long-term investment, but also increase manipulation of the numbers to please shareholders.’

“Political figures on the right and left, including Hillary Clinton and Barack Obama, have decried companies forgoing long-term investments in research and development and employee well-being in order to ‘make the quarter.’ Yet many have failed to zero in on the quarterly reporting requirements that drive this short-termism. Trump’s proposal tackles the problem at its source, and the SEC should end the quarterly reporting requirement in the very short term to make it easier for U.S. companies to focus on the long term.”