Last week National Grid, the UK electricity distributor, became the largest FTSE company to drop quarterly reporting of results after regulators in November removed the requirement for listed groups to publish interim management statements.
At last, it seems progress is being made on calls by ministers, regulators and senior investors for the market to shift its focus from the short term to the long term. This desire for a more long-term mindset was most notably advocated in the 2012 Kay Review of UK Equity Markets and Long-Term Decision Making.
Although it is just a small move in what is likely to be a slow and drawn out process, other companies are likely to follow National Grid and United Utilities, which has also abandoned quarterly reporting, in the UK and continental Europe.
It is also a heartening development for Simon Fraser in his new role as chairman of the UK's Investor Forum, launched last year to give investors a more powerful and unified voice. The creation of the forum was one of the 17 recommendations made by Professor John Kay in his review.
Mr Fraser makes the point that companies, partly responding to analysts' demands, focus too much on inputs. In other words, analysts, particularly among the banks or so-called sellside, tend to concentrate on data points in quarterly statements, such as earnings per share, return on equity and net sales.
This is understandable to a degree. Company performance metrics are important yardsticks by which to measure corporate success. Any decent sellside analyst and equity fund manager, for that matter, must clearly keep an eye on such things.
But Mr Fraser wants to promote a greater focus on long-term strategy, such as who the company is hiring, where it is building its factories and whether it is concentrating enough investment in its core market or whether it should expand into others.
If investors focused on these issues they would be more likely to pick stocks at the right time, which is essential for success in fund management, he says. Take Apple as an example. Timing has been paramount. The technology company's shares soared close to $120 last week after it announced the largest net income of any company in history, as iPhone sales beat even the most bullish Wall Street forecasts. If you had bought this stock 10 years ago when it was trading at around $2, you would have made a very decent return.
No one can see into the future, but an intelligent assessment of Apple 10 years ago, such as the quality of its management, its business plan and technological expertise, might have informed the wily investor that this company was worth buying in a way that short-term results probably would have failed to reflect.
In a similar vein, a good example of a company today that might benefit from being looked at through a long-term prism is Rolls-Royce, the UK engine maker. The company issued four profit warnings last year and chief executive John Rishton is under pressure to stop the rot.
But one top-10 investor in the company insisted to me last week that Mr Rishton is doing the right things, such as his investment in three big engine programmes. The investor thinks this will benefit shareholders over the long term as engine deliveries, expected to top 4,000 over the next 10 years, will feed through into earnings and boost the share price. He would advise buying Rolls-Royce, not selling.
Only time will tell if he is right. But taking this kind of long-term view is arguably more likely to pay off than obsessing over data points in quarterly earnings. If more companies do follow National Grid and abandon quarterly reporting, it will surely help in the battle to ditch short-termism. This, in turn, should benefit not just investors, but the wider economy as well.
David Oakley is the FT's investment correspondent
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