If you own shares in some of the UK's largest blue-chip companies you could soon stop receiving three-monthly trading updates – and most analysts agree it will be a good thing.
The Investment Association (IA), the industry group representing most of the UK's largest institutional investment funds, is to set out a new set of demands for company boards that will include scrapping quarterly interim reports, says The Daily Telegraph.
It's all part of a drive to redraw the relationship between listed companies and their investors and encourage a greater focus on a wider set of long-term objectives. A number of IA members have been working on the new scheme since last year, when they wrote to George Osborne setting out the role they can play in fixing the UK's productivity crisis.
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Quarterly reports have not been mandatory since November 2014, when the UK's Financial Conduct Authority changed its rules to bring them into line with reporting requirements across Europe, notes the Financial Times. Since then, companies such as National Grid, Legal & General and Unilever have ditched interim updates, but most still publish something on a three-monthly basis.
As a consequence, investors will go from getting four reports a year to two, with most experts agreeing that the companies involved will be able to concentrate more on their long-term goals and improve their performance.
The reporting change is just one part of the puzzle, however. The paper, expected to be published later this week, sees 11 key action points set around five key areas. Alongside investor communications, these include "stewardship, the relationship between owners and companies, capital markets, and the legal and regulatory framework", says the Telegraph.
Specific measures could force companies to open up their reporting to cover more than just a narrow set of financial and corporate governance information, as well as to demand that companies offer more insight into long-term expenditure programmes to better reflect where profits are generated.
The new demands have been described as "diktats" that all companies in the FTSE 350 will have to either comply with or to explain why not doing so fits in with their specific long-term strategy.
