It has been announced that Legal & General will instead provide “timely and frequent updates” as well as half-year and full-year reports.
The move follows the abolition of regulation requiring listed companies to publish interim management statements in November 2014.
“Making this change will help management and the board make the right long-term decisions in the interests of all our stakeholders,” said Nigel Wilson, Legal & General group CEO.
“Our business cycle is long-term, with many of our investment and business decisions playing out over years and sometimes decades, rather than quarters. As such, ending quarterly reporting will allow us to focus on communicating what is relevant to the value creation in Legal & General’s businesses.”
Last year also saw Legal & General write to the boards of the biggest 350 listed companies, urging bosses to end quarterly reporting.
Legal & General Investment Management CEO Mark Zinkula, made the plea as he believed annual reports would only limit firms to “focus on short-term performance”.
Zinkula said: “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.
“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.
“Some companies have already chosen to discontinue quarterly reports and we are supportive of their actions.”
He added that such reports added “little value”.
Crawford Spence, professor of accounting at Warwick Business School, said very few organisations have been “bold enough” to stop giving shareholders quarterly updates because of the fear of an investor backlash.
“That Legal & General have decided to do so is a very positive step,” Spence said. “Managers in big companies are often seen as the bad guys in the modern world, but they often only behave erratically because of the unrealistic demands placed upon them by shareholders.
“If management were given more time and room to develop long-term visions and strategies for companies then we would perhaps live in a more stable and less volatile and crisis-prone economic environment. Sensible company reporting has a role to play here too.”
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