Financial reporting periods impinge on management and employee mindsets, both overtly and covertly, and influence company cultures in many ways.
As an industry insider for more than 30 years, I have observed, first-hand, the changes in business practices and employee behaviour before and after the introduction of quarterly reporting in 2003 for Singapore-listed companies ("UK ends quarterly reports - how about Singapore?"; Thursday).
First, quarterly reporting is as frequent as it is administratively feasible for most companies.
Quarterly reports are, therefore, tantamount to interim reports; it would be a mistake to gauge a company's performance based on these reports, as no serious-minded company would plan on such a short-term basis.
The issue is that there are shareholders who demand positive results every quarter.
Ever so often, even analysts fail to see the big picture - usually due to the lack of information - and raise unwarranted alarm on companies reporting unimpressive quarterly results.
Wary of the potential heat, company boards are prone to demand sustained performances quarter to quarter.
And this has translated into management key performance indicators (KPIs) which are aligned with board expectations.
Incumbent managers risk a curtailed career for failing to meet these KPIs.
A perverse but real management survival skill thus emerges, and this involves making every effort to look good on each quarterly report - many a time having to defer certain cost initiatives so as not to compromise the bottom line.
These initiatives could include training, research and development, product and service upgrading, major and minor renovations, asset enhancement and so forth. Employees learn to respond accordingly, especially for those with good survival instincts.
Down the line, a short-term mindset starts to manifest - such as placing emphasis on sales to boost the top line and a loss of focus on product and service delivery.
Ultimately, company reputation and customer satisfaction suffer.
And it could be worse.
A company culture built on short-term gratification is likely to be unduly competitive, socially and environmentally ambivalent and even transient in nature.
These are negative traits that we should not wish any of our local companies to have.
Finally, as long as quarterly reporting is required, long-term strategic initiatives undertaken by the affected companies will face difficulties taking off.
Locally listed companies that harbour brand-building ambitions have to persevere and endure the agonising journey a little longer.
Yeoh Teng Kwong