Impact of Reporting Frequency on UK Public Companies

28 Pages Posted: 31 May 2017

See all articles by Robert Pozen

Robert Pozen

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Suresh Nallareddy

Duke University - Fuqua School of Business

Shivaram Rajgopal

Columbia Business School

Date Written: March 1, 2017

Abstract

Corporate executives have long decried the undue emphasis on short-termism - defined as maximizing corporate profits in the next quarter. Instead, most corporate executives say that they want to make corporate investments from a long-term perspective - defined as enhancing corporate value over a period of three to five years (Rappaport 2006).

This concern about favoring short-termism over long-termism has now spread to institutional investors (Perrin 2016). In an open letter, Laurence Fink, CEO of BlackRock, warned US companies that they may be harming their long-term value by capitulating to pressures from activist hedge funds to increase dividends or share buybacks in the short term (Fink 2015).

In response, commentators and regulators have proposed a broad range of remedies to curb short-termism in corporate America (Pozen 2014). These proposals include, but are not limited to, higher taxes on short-term trading, faster filings for groups acquiring more than 5% of a company’s voting stock, reduced say by institutional investors in managerial decisions, and increased voting rights for shareholders based on the length of their holding period.

Suggested Citation

Pozen, Robert and Nallareddy, Suresh and Rajgopal, Shivaram, Impact of Reporting Frequency on UK Public Companies (March 1, 2017). CFA Institute Research Foundation 2017B - 1; Columbia Business School Research Paper No. 17-59. Available at SSRN: https://ssrn.com/abstract=2977466

Robert Pozen (Contact Author)

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
E62-416
Cambridge, MA 02142
United States

Suresh Nallareddy

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States

Shivaram Rajgopal

Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

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