L&G to cease reporting quarterly figures
The move follows the abolition of a rule requiring listed companies to published “interim management statements” every three months.
L&G, which resigned from the Association of British Insurers last year, said its investors support its decision, which it claimed will allow it to “better articulate Legal & General’s business strategies and the long-term dynamics of its markets, through timely and frequent updates, rather than quarterly trading figures”.
Chief executive Nigel Wilson said: “Legal & General believes in long termism. The future success of the UK economy is dependent on companies and shareholders making the correct long-term business decisions. Legal & General believes making this change will help management and the board make the right long-term decisions in the interests of all our stakeholders.
“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.”
Crawford Spence, professor of accounting at Warwick Business School, said: “Although the requirement to produce quarterly financial reports for shareholders was relaxed in 2014, very few organisations have been bold enough to stop doing it. This is no doubt because of the fear of shareholder backlash. That Legal & General have decided to do so is a very positive step.
“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.”