Business Leaders Question Role of Quarterly Earnings Guidance

A coalition of the US’s most powerful investors and business leaders has thrown its weight behind the idea of scrapping quarterly earnings guidance. Boards should consider whether such guidance “does more harm than good”, according to a statement of corporate governance principles issued by 13 executives led by Jamie Dimon, JPMorgan Chase chief executive. “The cadence of boards is too much dominated by quarterly earnings guidance. In some cases the short-term communication about the short-term progress of the business can work negatively for the health of the business. The key to thinking long term is to get off this crutch.”