The debate over a potential change in reporting frequency risks missing a bigger point. Investor Relations at public companies will need to continue satisfying the market’s insatiable appetite for information and engagement, regardless of reporting frequency.
For more than half a century, quarterly earnings reporting has been a non-negotiable cost of being a public company in the US.
Any CEO or CFO of a public company will tell you that quarterly earnings consume an inordinate amount of time and resources that could otherwise be spent running the business. Still, the rigor of the quarterly earnings process instills discipline, and investors are justified in expecting a significant amount of information and transparency.
That means that some will celebrate the recent proposal to shift from quarterly to semi-annual reporting, while others will view it skeptically.
One fact is indisputable – we live in an era where information is more abundant, moves faster, and comes from more sources than ever before. Regardless of whether a company reports earnings twice or four times a year, that trend will not subside.
Institutional and retail investors now have a wide and ever-increasing array of platforms to share their perspectives on companies and stocks and potentially influence others. Whether it’s X, Reddit, Discord, YouTube, podcasts, or Substack, the number of voices shaping sentiment around stocks is surging.
Whether reporting frequency changes or not, companies should plan for information and engagement demands on management and IR teams to intensify. If there were less frequent mandated disclosures and touchpoints, the risk that market expectations diverge from actual performance would actually grow – unless proactively managed. IR teams must continually evolve their engagement strategies to ensure that reality and expectations remain aligned, irrespective of reporting frequency.
A changing IR landscape
What does a best-in-class IR program look like when information is fast-moving, increasingly decentralized, and shaped by a multitude of voices?
Always-on: The era of relying on tentpole moments – quarterly earnings calls, investor days, conferences – is dwindling. IR must maintain a continuous presence across multiple channels, and be prepared to engage, clarify, and correct information in near-real time so that wherever investors go, they receive accurate, consistent messaging.
Informal and unstructured engagement: Investors increasingly seek informal, less structured and more authentic interactions. This could mean senior executives or investor relations participating in online forums, hosting fireside chats, or engaging directly on social platforms, all in compliance with Reg FD. Earnings calls may also evolve, especially if reporting frequency changes, and further shift the call’s focus from delivering scripted remarks to extended Q&A.
Engagement with smaller, vocal influencers: The rise of new media has empowered niche voices. IR will still be the leading source of primary information about their companies, but they should also be prepared to include and/or interact with credible individuals who drive conversations within investor communities and influence the market’s perception, which could further dilute the role and influence of the sell-side community.
Faster communication cycles: Speed is paramount. IR teams must be prepared to respond quickly to emerging narratives or misinformation and address those narratives with thoughtful, credible content.
Imperative for collaboration
Perhaps most importantly, the new landscape demands closer collaboration between IR and Communications. The old boundaries – IR managing analysts and investors, Communications handling the media and press – are blurring. Today, analysts and investors consume content from a broader set of sources, and companies must ensure their narrative is represented consistently, whether in an earnings release, on CNBC, in a Substack post, or in a viral Reddit thread.
IR and Communications must work hand-in-glove to develop and distribute owned content, monitor sentiment across platforms, and engage with influencers wherever they operate. This requires investing in tools and processes to track conversations, understand emerging narratives, and respond proactively. And for IR professionals who are former sell-side analysts and accustomed to more traditional mechanisms for communication like SEC filings, partnering closely with Communications is essential.
The implications of less frequent reporting
Any discussion about the IR landscape must acknowledge Reg FD, which mandates that all material information be shared broadly and simultaneously with the public. There are a host of related potential policy implications to evaluate ranging from guidance to quiet periods.
Moving from quarterly to semi-annual reporting would increase the risk of information asymmetry and market speculation. If that were to happen, companies would need to be even more vigilant about how and when they communicate material developments, with the bar for materiality potentially lower. This includes considering more robust ongoing disclosure practices and greater transparency outside of traditional earnings cycles (e.g., more 8-K filings, interim reporting of certain key metrics) to avoid inadvertent selective disclosure. Companies would also need to ensure that the appropriate owned communications channels are officially deemed disclosure channels for Reg FD compliance.
Embracing the future
Whether companies like it or not, conversations about their business are happening anywhere and everywhere. Winning - and retaining - the hearts and minds of investors will require navigating this fragmented landscape to ensure their story is told accurately, credibly, and consistently across every channel that matters. To be best-in-class, IR functions must embrace the complexity of the new environment, adapt their strategies, and collaborate more closely than ever with Communications. This imperative transcends the question of reporting frequency.