Should Saudi Arabia abolish quarterly reporting?
Why the renewed American debate on disclosure misses the point for emerging markets like Saudi Arabia.
In recent weeks, the long-standing debate over how frequently listed companies should report their results has resurfaced in the United States. President Donald Trump has urged the US Securities and Exchange Commission to abolish quarterly reporting and require disclosures only twice a year. The new SEC Chair, Paul Atkins, has echoed this view, promising to fast-track proposals that would halve the number of filings.
The move has divided investors and regulators. Supporters argue that quarterly disclosures impose excessive compliance costs. They encourage executives to focus on short-term targets rather than creating long-term value. Critics warn that such a step would weaken transparency and erode investor confidence. In America, the debate reflects a deep-seated frustration with what has been called “quarterly capitalism” - the relentless focus on beating analysts’ expectations every three months.
But what makes sense in the United States does not automatically apply elsewhere. In Saudi Arabia, the Capital Market Authority (CMA) and the Saudi Exchange (Tadawul) have established a reporting system in which quarterly disclosure is a cornerstone of governance and market integrity. The Saudi market has a very different structure compared to Wall Street. It is dominated by long-term investors such as the Public Investment Fund and large family groups. Short-term hedge-fund activity is minimal, and companies rarely issue quarterly earnings guidance. The speculative pressures that distort behavior in New York or London are less of an issue in Riyadh.
In this environment, quarterly reporting serves a more constructive purpose. It is a disciplinary mechanism that compels boards, management, and audit committees to remain engaged with financial performance and internal controls throughout the year. For the CMA, it is a vital supervisory tool that allows early detection of potential problems. For investors, especially minority and foreign shareholders, it reduces their information asymmetry and provides reassurance that transparency is consistent and ongoing.
Abandoning quarterly reporting would risk weakening that trust just as the Kingdom’s capital market is becoming more globally integrated. Saudi Arabia has begun the process of opening its doors to international investors. Regular disclosure remains a key part of that credibility. Less frequent reporting could send an unintended signal that standards are being lowered at a time when the Kingdom is seeking to raise them.
The American debate nonetheless offers a useful reminder that the quality of disclosure matters as much as the frequency of disclosure. The issue is not whether Saudi companies report every three or six months, but rather how effectively they communicate their performance, strategy, and risk. There is scope to strengthen the substance of quarterly reporting by including richer narrative commentary, clearer links to strategy, and more integrated ESG and sustainability information. Improved digital presentation and timelier event reporting could also enhance the usefulness of the information without reducing transparency.
Quarterly reporting, in other words, should evolve, not disappear. It remains an essential component of Saudi Arabia’s governance infrastructure, reinforcing accountability, predictability, and investor confidence. Where the US may seek to ease an overly burdensome regulatory regime, Saudi Arabia still relies on its quarterly rhythm to foster a culture of openness and oversight.
The Kingdom’s challenge is not to mimic America’s retreat from disclosure, but to refine its own standards to support its goals: attracting capital, deepening markets, and embedding world-class governance. For now, the quarterly report is not a burden to be lifted, but a signal of financial development – an important aspect of a market that is aiming for transparency as a foundation of trust.
Dr. Roger Barker
Chief Research and Thought Leadership Officer, Center for Governance
Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the opinion or position of the Center for Governance.