As the U.S. Securities and Exchange Commission continues to contemplate a shift towards permitting semi-annual reporting, boards and management teams will face important questions about the implications for investor relations strategies. If adopted, companies considering the move to semi-annual filings will face key questions, including the level of quarterly disclosure to maintain and how to sustain regular engagement with investors between reporting periods. 

Below are the considerations for companies to keep in mind as they determine the right approach moving forward:

1. Investors view disclosure as the bedrock of trust, credibility, and visibility.

The primary goal of public company investor relations is to cultivate a long-term, supportive shareholder base built on transparency and trust. Information transparency and regular engagement with investors is critical to reducing cost of capital and market volatility – and is why companies regularly participate in conferences, non-deal roadshows, and investor days. Reducing formal reporting risks leaving investors reliant on either stale information or more frequent off-cycle disclosures from companies.

2. Fewer reports raise the pressure on each one.

The quarterly earnings process requires significant time and resources. However, the potential transition to two reports a year would only heighten the stakes of each, creating longer preparation cycles, higher expectations, and more intense scrutiny from the investment community.

3. The information vacuum will get filled – just not by the company.

A change in disclosure requirements will not diminish the investment community’s appetite for information. In the absence of quarterly updates, investors will increasingly rely on industry data, third-party datapoints, and channel checks – but without the context or perspective only companies can provide.

4. Companies risk ceding control of their narrative when it matters most.

During a crisis or activist campaign, the quarterly earnings report and call often provide an important platform for management to explain its position – not only to investors, but also to a wider group of stakeholders. Less frequent reporting would reduce opportunities to shape that narrative.

5. Reducing disclosure creates asymmetric risk.

For most companies, the risks of being an early adopter of reduced disclosure are likely to outweigh the benefits. Even in markets where semi-annual reporting is standard, many companies continue to provide some form of quarterly update. But without a common market standard, companies that opt for less frequent disclosure may face criticism for being less transparent than their peers.

6. Today’s market demands more communication, not less.

Companies are operating in an environment shaped by technological disruption, geopolitical uncertainty, economic volatility, and emerging risks. As a result, demand from investors for timely information is increasing, not declining.

In conclusion, while less frequent reporting could give companies more room to demonstrate progress against long-term strategic initiatives without quarter-to-quarter noise, the U.S. capital markets ecosystem is built on expectations of regular disclosure and engagement. That framework has helped support the depth, liquidity, and global appeal of U.S. capital markets. It is hard to imagine a world in which institutional or individual shareholders place greater value on receiving less information and engaging less frequently with the companies they own.