UK opposition to quarterly reports is well-founded

The news that the boffins in Brussels are planning to force European companies to report on a quarterly basis has been greeted, as usual, with opposition in Britain.

But this time, Current Account believes our neighbours may have a point.

While quarterly figures undoubtedly provide greater transparency, offering a more dynamic and up-to-date picture of how a company is faring, the risks may outweigh the benefits.

Evidence from the US suggests they may promote an undue focus on short-term performance at the expense of longer term planning and development.

Indeed, the obsession with earnings caused by the pressure to meet Wall Street's expectations every quarter has been one of the factors cited for the recent raft of US accounting scandals.

Fund managers also point out that quarterly releases mean companies spend far more time in closed periods, providing an excuse for less-timely disclosure of price-sensitive information.

Overall, the vibe out of Britain is that investors would prefer to see a continuation of the six-month system, albeit with better trading updates in between.

In an Irish context, one element of the results process that could be improved is the speed with which companies deliver their results. Just a handful of Irish companies - including AIB, First Active and Paddy Power - reported interim results within a month of the end of the first half.

A few others have come through with results in August but it will be September before the interim reporting season really swings into action here. Even that exemplar of corporate governance, CRH, does not report until September 3rd, more than two months after the end of the first half.

And then there are the real laggards, whose first-half results will appear as the full year is drawing to a close, long after they are meaningful.