This quarterly ritual, enshrined since the Securities Exchange Act of 1934, has evolved from a transparency measure into what critics describe as a corporate straitjacket—one that Donald Trump now proposes to loosen by adopting Europe's half-yearly reporting model.

American corporations operate within what economists call the "quarterly imperative"—a system where three-month performance cycles drive strategic decisions with profound long-term consequences. Unlike their European counterparts, who abandoned quarterly reporting in 2013 to encourage patient capital, American executives find themselves perpetually auditioning before Wall Street's unforgiving audience.

The mechanics are revealing. In the final weeks of each quarter, corporate behaviour becomes predictably irrational. Research and development spending mysteriously drops, capital expenditures are deferred, and marketing budgets are slashed—all to meet analyst expectations that may differ from actual performance by mere pennies per share. This "earnings management" represents a peculiar American innovation: sacrificing tomorrow's competitive advantage for today's stock price stability.

Consider the pharmaceutical industry, where drug development requires decade-long investment cycles. American biotech firms routinely abandon promising research programs when quarterly pressures mount, while their European peers, operating under half-yearly reporting, demonstrate greater tolerance for extended development timelines. The result is a competitive disadvantage disguised as financial discipline.

America's hire-and-fire culture, celebrated as "employment flexibility," reveals its darker implications under quarterly scrutiny. Unlike European workers protected by stringent labour laws, or Middle Eastern employees benefiting from loyalty-based employment systems, American workers exist as adjustable variables in quarterly equations.

The data is stark: American workers face termination rates triple those of their German counterparts and experience job tenure averaging 4.1 years compared to 10.9 years in Japan. This "employment at will" doctrine, while enabling rapid corporate restructuring, creates a workforce perpetually insecure and strategically myopic. Employees, knowing their tenure depends on quarterly performance, optimize for short-term metrics rather than long-term value creation.

This contrasts sharply with corporate practices in South Asia, where family-owned conglomerates like India's Tata Group prioritize employee retention and gradual capability building. In the Gulf states, state-backed enterprises blend commercial objectives with social stability, viewing workforce disruption as economically and politically costly. These systems, while sometimes inefficient, foster institutional knowledge and strategic patience—luxuries increasingly rare in American boardrooms.

Europe's abandonment of quarterly reporting offers an instructive counterpoint to American practices. When the European Union scrapped mandatory quarterly reporting, the stated objective was reducing administrative burden. The unstated benefit proved more significant: liberating management from short-term performance theatre.

European corporations, operating under this extended reporting cycle, demonstrate measurably different strategic behaviour. German industrial giants like Siemens invest heavily in manufacturing automation and workforce training—investments that depress short-term profitability while building long-term competitive moats. French luxury conglomerates like LVMH pursue brand-building strategies spanning decades, viewing quarterly fluctuations as statistical noise rather than strategic signals.

This patience manifests in employment practices too. European corporations, constrained by labour protections but freed from quarterly reporting pressures, invest more heavily in employee development and retention. The result is a workforce that, while more expensive to maintain, delivers superior productivity and innovation over extended periods.

Trump's proposal to adopt European-style half-yearly reporting contains both merit and mischief. Superficially, the reform addresses legitimate concerns about short-termism that have been voiced by respected figures from Warren Buffett to Jamie Dimon. Reducing reporting frequency could indeed encourage the patient capital formation that built America's industrial base in the 20th century.

Yet the proposal's timing raises questions about motivation. Quarterly earnings serve as economic barometers, providing real-time insights into corporate health that inform everything from Federal Reserve policy to investment allocation. By reducing this frequency, Trump potentially shields his administration from regular economic scrutiny—a convenience that serves political more than economic objectives.

The broader question concerns corporate governance. American capitalism's greatest strength—its transparency and accountability—depends partly on frequent disclosure. European corporations operate within different governance frameworks, with stronger regulatory oversight and stakeholder representation that compensates for reduced reporting frequency. American corporations, operating within a shareholder-primacy model, might interpret reduced oversight as licence for greater risk-taking or self-dealing.

The quarterly reporting system has fostered what scholars describe as "metric fixation"—the belief that complex organizational performance can be reduced to simple numerical targets. This reductionism corrupts corporate decision-making in predictable ways: CEOs manipulate expense timing, engage in stock buybacks to inflate earnings per share, and sacrifice investment in intangible assets like employee training or customer relationships.

The ethical implications extend beyond accounting creativity. Quarterly pressures encourage executives to view workers as cost centres rather than strategic assets, communities as externality producers rather than stakeholders, and environmental responsibility as discretionary spending rather than operational imperative. This mindset, while economically rational within a quarterly framework, produces systematic underinvestment in long-term value creation.

Trump's proposal, while politically motivated, inadvertently highlights genuine flaws in American corporate governance. The solution, however, requires more than simply extending reporting cycles. Meaningful reform would address the underlying incentive structures that drive short-term thinking: executive compensation tied to quarterly performance, activist investor pressure for immediate returns, and regulatory frameworks that prioritize disclosure frequency over disclosure quality.

European corporations succeed with half-yearly reporting because they operate within broader institutional frameworks that encourage long-term thinking: patient capital markets, stakeholder governance models, and regulatory systems that balance shareholder interests with broader economic objectives. American corporations, absent these supporting structures, might simply use extended reporting periods to obscure rather than improve performance.

The quarterly trap that ensnares American capitalism reflects deeper contradictions in the system: a market economy that celebrates long-term innovation while rewarding short-term optimization. Trump's proposal, whatever its motivations, forces a necessary conversation about corporate purpose in democratic societies. The question is whether America will use this opportunity for genuine reform or merely trade transparency for political convenience. (IPA Service)