Donald Trump and the former boss of Unilever have formed an unlikely alliance in calling for an end to the ‘sugar hit’ of quarterly reporting.
The practice – which is mandatory in the US but ever more rare in the UK – has been blamed for encouraging short-term thinking in the boardroom at the expense of long-term investment by listed companies.
The President last week called for it to be scrapped, saying the rule was ‘not good’. Axing it would ‘save money and allow managers to focus properly on running their companies’, he added. It would bring New York into line with London and other stock exchanges, where half-yearly trading updates are the norm.
Trump’s demand was backed by Paul Polman, who pioneered the move from quarterly reporting at consumer goods giant Unilever.
Polman said the practice ‘promotes the sugar hit over the steady meal, the easy cut over the lasting investment’.
The alliance is raising eyebrows as the two men’s views on the environment are polar opposites. And Trump’s clampdown on ‘woke’ or ‘stakeholder’ capitalism, which Polman had championed, prompted Unilever’s new bosses to scale back its corporate social responsibility campaigns.
Demand: Donald Trump and the former boss of Unilever have formed an unlikely alliance in calling for an end to the ‘sugar hit’ of quarterly reporting
Only eight of Britain’s biggest companies still report results every three months, new analysis shows. In the FTSE 100 index, just AstraZeneca, GSK, Shell, Barclays, BP, HSBC, NatWest and Lloyds do so, according to stockbroker AJ Bell, and all have secondary listings in New York where quarterly reporting is mandatory.
Critics say twice-yearly updates mean less disclosure when shareholders want more transparency. But Andrew Ninian of The Investment Association lobby group said UK rules meant any ‘material price sensitive information’ was published promptly, allowing for ‘informed investment decisions’. Firms such as betting giant Flutter and Tarmac-owner CRH have moved their main listing from London to New York in search of higher stock market valuations.
However others are put off by the prospect of getting tied up in an endless reporting cycle.
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