Legal & General Investment Management (LGIM) has suggested that firms stop "unnecessary" quarterly financial reporting.

In a letter issued to the boards of FTSE 350 companies the asset manager described its support for the recent regulatory change that removes the requirement for companies to disclose financial reports on a quarterly basis.

“As a major investor in the shares and bonds of UK listed companies, invested through both active and index funds, we highly value the communication that we have with management teams," said Mark Zinkula, chief executive at LGIM. 

"For many businesses, we believe, reducing the time spent on frequent reporting could help management to focus more on long term strategies and articulate more on market dynamics and innovation drivers that will enhance their performance over time."

“Some companies have already chosen to discontinue quarterly reports and we are supportive of their actions.”

The letter stated that reporting focusing on short-term performance is not necessarily conducive to building a sustainable business as it may steer management to focus more on short-term goals and away from future business drivers.

LGIM also acknowledged that the management and boards of companies will ultimately make appropriate judgments as to the relevance of their quarterly reports, based on their unique business environment.