These two commentators – Nell Minow and Aswath Damodaran – sum up the topic as well as any.
CSC says the following:
- It is interesting that there are many versions and changes to this topic around the world and somehow investors manage.
- “Short-termism” takes two to tango. It is a falsehood to say, “oh poor me management, those Pod D-bags make me report quarterly and think short-term.” There is PLENTY Of long term money still alive and investor relations is very much akin to dating in your 20’s: if you wear 3 gold-chains and lease a Ferrarri you can’t afford, then you will attract who you deserve.”
- Which also means eliminating “mandatory” doesn’t mean you cannot report quarterly. Life will sort itself out and if management whines about their stock price being too low, they might look at their new disclosures policies as being a variable?
- If the CEO is being paid $10mm a year, it’s sort of hard to fall back on “quarterly reporting is expensive.”
- Are corporate insider trading rules going to change as well, so “windows” are now twice a year vs quarterly?
Let’s face it. The barn doors have been open for a long time. While enjoyable to imagine a world of thoughtful long-term investors making intelligent and rational decisions, and the corporate world doing the same – I just seriously doubt this will help.
