Right before the SEC open meeting originally scheduled to discuss the issue, the SEC has posted a “request for comment soliciting input on the nature, content, and timing of earnings releases and quarterly reports made by reporting companies.” (The matter has been deleted from tomorrow’s agenda.) According to the press release, the request for comment solicits “public input on how the Commission can reduce burdens on reporting companies associated with quarterly reporting while maintaining, and in some cases enhancing, disclosure effectiveness and investor protections. In addition, the Commission is seeking comment on how the existing periodic reporting system, earnings releases, and earnings guidance, alone or in combination with other factors, may foster an overly short-term focus by managers and other market participants.” The public comment period will be open for 90 days following publication of the Request in the Federal Register.
(Note that the SEC also adopted hedging policy disclosure rules and likewise removed that from tomorrow’s agenda, but more on that tomorrow.)
McKinsey study suggests alliances with sophisticated long-term investors can help blunt corrosive effects of short-termism
by Cydney Posner In this study, consulting firm McKinsey raises the question of why so many companies seem to be ensorcelled by their short-term investors, which own only about 25% of the shares of U.S. companies, while failing to address — or perhaps even understand — the needs of their long-term […]
by Cydney Posner Much has been written about the problems associated with the prevalence of short-term thinking in corporate America. As noted in a post from The Harvard Law School Forum on Corporate Governance and Financial Regulation, a recent academic study revealed that “three quarters of senior American corporate officials […]