Should Businesses Issue Quarterly Reports?

Hisashi Kitahara, an editor of the Japanese newspaper The Yomiuri Shimbun, questions the advisability of a new Tokyo Stock Exchange regulation requiring Japanese firms to release quarterly financial statements. He argues that it will cause the Japanese managers and investors to focus on short-term results to the detriment of focusing on long-term strategies, which has been a hallmark of their past economic success.

I have worked extensively with Japanese companies. While it can be frustrating to try to motivate them to action, Mr. Kitihara is correct that the Japanese ability to plan long-term has been a key element of the economic success. To jeopardize that now by pushing them toward quarterly reports, while opening them up to the same stock manipulation temptations the US has had to endure, is not smart.

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