Donald Trump’s endorsement this week of a six-monthly reporting cycle for US-listed companies is far from his worst idea. Switching from quarterly earnings could encourage more strategic thinking by removing the three-monthly temptation for companies to “beat” analysts’ expectations. Unfortunately, it is exactly this strategic mindset that the US president lacks.
His preference for twice-yearly reporting is one of a series of deregulatory measures that he or his officials have announced, threatened or hinted at recently. Together they would work against corporate transparency, set back shareholder rights, push the balance of boardroom power too far towards chief executives and, at worst, open the door to self-dealing or fraud.
Since taking over in January, Securities and Exchange Commission chair Paul Atkins has aimed to cut “compliance burdens” on companies. Last week, on a visit to Europe, he told the FT the SEC would in future alert businesses about technical violations rather than first sending regulators to “bash down their door”.