The UK’S biggest asset manager has written to the UK’s biggest 350 listed companies, urging them to ditch quarterly financial reports.
Reporting which focuses on short-term performance is not necessary to building a sustainable business as it may steer management to focus more on short-term goals and away from future business drivers, Legal and General Investment Management (LGIM) said today.
It follows a UK rule in change in November 2014 that put an end to mandatory financial reports every three months.
“As a major investor in the shares and bonds of UK listed companies, invested through both active and index funds, we highly value the communication that we have with management teams,” said LGIM chief exec Mark Zinkula.
“For many businesses, we believe, reducing the time spent on frequent reporting could help management to focus more on long term strategies and articulate more on market dynamics and innovation drivers that will enhance their performance over time,” he added.
“Some companies have already chosen to discontinue quarterly reports and we are supportive of their actions.”