In Focus

BRT, with CII Support, Urges Move Away from Quarterly Earnings Guidance

The Business Roundtable on June 7 encouraged public companies to move away from providing quarterly earnings-per-share guidance. In a Wall Street Journal op-ed, Berkshire Hathaway Chairman Warren Buffett joined BRT Chairman Jamie Dimon (chairman and CEO of JPMorgan Chase) in writing that “quarterly earnings guidance often leads to unhealthy focus on short-term profits at the expense of long-term strategy, growth and sustainability.” CII Executive Director Ken Bertsch expressed support for the BRT statement, saying, “When companies are managed for the long term, it creates value for shareholders with long investment horizons. Practices that encourage long-term thinking and investment create value for millions of Americans without sacrificing the transparency and accountability that investors deserve.”

CII Balks at House Proposals to Change Shareholder Proposal Rules, Quarterly Financial Reports and XBRL Disclosure

CII sent a letter to leaders of a House Financial Services Committee panel expressing concerns about three bills dealing with financial regulation that were discussed at a May 23 hearing. One would hike resubmission thresholds for filing shareholder proposals. Noting that shareholder proposals have ushered in may significant improvements to corporate governance, CII said that current thresholds provide a reasonable amount of time for emerging issues to gain traction. A second bill to make quarterly financial reporting optional would eliminate potentially critical information investors rely on, CII argued. The third bill would eliminate or ease requirements for certain kinds of companies to use XBRL technology for their SEC filings. If enacted, CII said, the legislation would impede efforts to modernize disclosure and make company filings less useful to investors.