Another quarterly earnings season starts on Thursday. Over the next two months, we would see stock tickers flashing, analysts dissecting numbers, and companies scrambling to meet or beat expectations. But as the dust settles, one question deserves more attention: is this obsession with quarterly results really serving the long-term interests of businesses and investors? On paper, quarterly result announcements have long been seen as the gold standard of corporate transparency. In practice, however, they often create a culture of short-termism.
Companies, fearful of a dip in share price or a harsh analyst downgrade, tend to prioritise cosmetic gains over sustainable strategy. Cost-cutting that undermines innovation, marketing blitzes that inflate sales for a quarter, or delayed investments in future technologies—all are side effects of managing the quarter rather than building for the decade.
Indian regulators to take a page from the US notebook
For a change, US President Donald Trump seems to have spoken something sensible by asking the Securities and Exchange Commission (SEC) to consider ending the mandate that public companies file quarterly reports. SEC Chairman Paul Atkins has been quick to respond and said such a rule change is under consideration.
It’s time Indian regulators also take this debate seriously. For, it is time to ask whether this ritual truly serves businesses and investors—or whether it is adding more noise than value. What began as a tool for transparency has, over time, become a straitjacket—shaping decisions, incentives, and even corporate culture in ways that do not always serve long-term interests. The problem lies not in disclosure itself, but in the frequency.
By forcing management to deliver results every 90 days, the system encourages a short-term mindset. Investors, too, are not always better informed. A single quarter’s performance often reflects seasonal factors, commodity price swings, or accounting adjustments—none of which reveal a company’s long-term strength. Judging businesses on such volatile snapshots can create more confusion than clarity, fuelling unnecessary market swings.
Warren Buffets and Dimon’s arguments against quarterly treadmill
Globally, respected voices such as Warren Buffett and Jamie Dimon have argued against the quarterly treadmill, urging a shift to longer-term evaluation. Their message is clear: real value is created by long-term vision, not quarterly theatrics. The European Union (EU) and the United Kingdom (UK), which had shifted to mandatory quarterly reporting in the mid-2000s, reverted swiftly to six-month reporting requirements in the 2010s.
However, even after the return to semi-annual reporting, some companies, particularly large multinational corporations, continued to produce some form of quarterly reporting in response to investor demand. Many companies have voluntarily provided quarterly earnings guidance. Thus, a more balanced approach—half-yearly reporting, supported by qualitative updates on strategy, risks, and progress—would still ensure transparency while giving management the breathing room to focus on building sustainable value.
Regulators, boards, and investors alike should therefore ask whether quarterly mandates are still serving their purpose. True, accountability is non-negotiable, but accountability must be meaningful, not mechanical. True performance is measured not in quarters, but in years. If regulators, boards, and investors recalibrate the system, businesses will have the freedom to prioritise vision over volatility. More reporting does not always equal better governance.
Sometimes, less is more. When boards and investors judge managements solely on quarterly numbers, companies begin to manage for optics, not outcomes. It’s nobody’s case that revising the mandatory reporting schedule will, on its own, remove short-termism from the capital markets, but it could be a step in the right direction.