Reporting change reveals cultural gap

[LONDON] As investors prepare to digest the latest round of company earnings figures, Britain's move to scrap the quarterly reporting requirement has revealed a divergence of opinion between the domestic and US investment communities.

While British investors endorse what they perceive as a measure against short-termism, their counterparts across the Atlantic are concerned that less frequent company reports will mean less transparency.

In a world of increasing financial regulation, Britain is bucking the trend by accelerating EU plans to relax the current reporting rules, which are especially onerous for small firms. "A desire to not disappoint the markets, when you are speaking to the markets every three months, will inevitably lead to the business making short-term decisions to the detriment of long-term shareholders," said Kevin Murphy, a fund manager at Schroders, one of Britain's biggest asset management companies.