LONDON • One of the largest UK pension fund managers said it will no longer be providing quarterly financial reports, a move that will give a boost to those who believe that listed firms should focus on longer-term goals and objectives.
In a statement posted on its website last Friday, Legal and General said that it is ending its quarterly reporting and focusing on communicating what is relevant.
"Our business cycle is long-term, with many of our investment and business decisions playing out over years and sometimes decades, rather than quarters," said its chief executive Nigel Wilson.
In November last year, the UK Financial Conduct Authority removed the requirement for companies to publish interim management statements - or quarterly financial reports.
The move was supported by chief executives such as Unilever's Paul Polman, who had once called quarterly financial reports "quarterly capitalism".
But since the decision to scrap the rules, only a few companies have decided to discontinue quarterly reporting.
The majority of firms have continued with the practice, especially those with a big US investor base as US firms are still subject to quarterly reporting.
Warwick Business School's professor of accounting, Dr Crawford Spence, said that few have scrapped their quarterly reports because of the fear of a "shareholder backlash".
"The notion that we need more transparency and more accountability all the time has not produced better-quality information, as was hoped, but only led to the intensification of short-term pressure upon companies," he said.
"If management were given more time and room to develop long-term visions and strategies for companies, then we would perhaps live in a more stable and less volatile and crisis-prone economic environment. Sensible company reporting has a role to play here too."