Part 6/9:
In a recent tweet, President Trump suggested that the SEC study the possibility of transitioning from quarterly to semi-annual earnings reporting for public companies. This idea stems from the belief that the current quarterly reporting structure may foster short-term thinking among executives, hindering long-term business strategy.
Historical Context and Arguments
The logic behind quarterly reporting was established during the 1934 Securities Exchange Act to provide transparency and protect investors. However, critics argue it promotes a short-sighted focus within management, incentivizing decisions beneficial only in the short-term.