# Trump is Right: Quarterly Earnings Reports Should Go

1 Opinion August 23, 2018 CNNMoney ![Tensie Whelan](/sites/default/files/styles/246w/public/assets/images/TensieBody.jpg?itok=DSVRCnmy) By Tensie Whelan > It's unclear if moving to semi-annual reporting will cure corporate short-termism, but it's a step in the right direction.

Last week, President Donald Trump suggested in a tweet that companies could report results every six months instead of quarterly.

"That would allow greater flexibility & save money. I have asked the SEC to study!" he tweeted.

Quarterly reporting seems like a good thing — transparency ensures informed decision-making by investors. And critics of Trump's idea have cited concerns over a lack of transparency leading to increased investor risk.

Yet in practice, quarterly reporting has evolved into a system of managing primarily for the quarterly numbers, with a net result of distorting financial performance negatively, much in the way teaching students solely to perform well on a standardized test distorts their learning.

The focus on quarterly results has brought us unprecedented share buybacks which artificially boost stock prices, non-strategic cost-cutting, less investment in longer-term basic and applied research (versus product development), as well as an unhealthy pressure on labor costs.

For instance, from 2003 to 2012, the 449 companies publicly listed in the S&P 500 index used 54% of their earnings to buy back their stock, and another 37% went toward paying dividends, leaving little left to invest in employees or innovation.

Read the full [*CNNMoney* article](https://money.cnn.com/2018/08/23/news/trump-quarterly-reporting/index.html).
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*Tensie Whelan is a Clinical Professor of Business and Society and Director of the Center for Sustainable Business.* ## More Opinions from Tensie Whelan

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- [How LPs Can Better Assess Sustainability-Linked Value Creation.](https://www.stern.nyu.edu/index%2ephp/experience-stern/faculty-research/opinion/how-lps-can-better-assess-sustainability-linked-value-creation)
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