What Would Happen if the U.S. Stopped Requiring Quarterly Earnings Reports?

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President Trump has just asked the SEC to study the implications of moving to a half-yearly reporting deadline instead of the current requirement to file 10-Q forms on a quarterly basis. Over the years, I have heard from plenty of managers who have lamented that the pressure of quarterly earnings targets imposes a heavy toll on their ability to focus on the long term. Some of the managers actively advocate doing away with quarterly reporting. Opponents fear that banning quarterly reporting will not stimulate long-run investments nor will it end earnings management. Instead, they worry that managers will simply go from obsessing over smoothing out quarterly numbers to obsessing about smoothing half-year numbers. Moreover, twice yearly reporting would make companies less transparent. Some argue that such a change would have little effect simply because analysts would pressure firms to keep up reporting on a quarterly basis. Which

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What We Do and Don’t Know About Worker Representation on Boards

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Appointing workers’ representatives to company boards may be an idea whose time has come.

Politicians seem to like it. The most recent politician to make such a proposal is U.S. Senator Elizabeth Warren who would like to require companies with more than $1 billion in revenue to let workers elect 40% of board members. Before Senator Warren, a politician from the other side of the Atlantic and the other side of the political spectrum, Theresa May, pledged during her campaigning to be Prime Minister in 2016 to allow workers to be represented on company boards. Since becoming Prime Minister, she has not followed suit, though. And French President Emmanuel Macron, after months of confrontation with labor unions on his labor market reform, is considering changes to the corporate governance to, among other issues, strengthen workers’ participation to company boards.

Academics are also taking a fresh and

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How HR and Judges Made It Almost Impossible for Victims of Sexual Harassment to Win in Court

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Last December, Time magazine gave its award for person of the year to the “the silence breakers,” commemorating a broad societal awakening about the pervasiveness of sexual harassment in the workplace. As the #MeToo movement geared up, and as prominent men resigned or were fired, organizations rushed to create or update anti-harassment policies, complaint procedures, and training programs.

This approach may be misguided. Programs, policies, and training alone do not stop sexual harassment and abuse. My book Working Law — based on surveys of organizations, interviews with HR professionals, and content analyses of both human resources journals and federal court opinions — shows that sexual harassment policies and procedures can comfortably coexist in organizational cultures where women are regularly subjected to demeaning commentary, unwanted physical contact, and even threats or sexual assault. In other words, someone can be sexually harassed without recourse in an organization with

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What Would It Take to Get Businesses to Focus Less on Shareholder Value?

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Last week, Massachusetts Senator Elizabeth Warren announced that she’s about to propose the most significant change in U.S. corporate governance in 100 years. We don’t yet have the full details, but one reading of her piece is that she’s going to propose requiring every company with more than $1 billion in revenue to become a “benefit corporation” — a corporation whose fiduciary duty is not only to its shareholders but to all its major “stakeholders.”

The senator argues that such a charter would redefine the purpose of the firm — away from a single-minded focus on maximizing shareholder value and toward a perspective that balances the need to give returns to investors with the welfare of the firm’s employees, customers, and communities. She suggests that this has the potential to increase both investment and real wages, reversing almost 30 years of accelerating inequality.

Senator Warren has put her finger

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Worker Representation on Boards Won’t Work Without Trust

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U.S. Senator Elizabeth Warren has proposed a novel way to reform corporate governance. It would require companies with more than $1 billion in revenue to get a corporate charter from the federal government (rather than from an individual state), which in turn would require a commitment to a broad range of stakeholders, including not just shareholders but also employees and the communities in which the businesses operate. In addition, federally chartered companies would be required to let workers elect 40% of board members. There are other aspects of the proposal, including an aim to limit stock buybacks and stock-based compensation — you can read more about it here or here.

Warren’s vision is to ensure that the success of U.S. companies is shared more broadly, rather than largely benefiting shareholders. But would it have that effect?

The idea seems to be that having a more

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A Fair Share From Airbnb

I will be attending a press event today in NYC where Airbnb is announcing a $10mm program to support local efforts that improve the lives of New York State residents.

Airbnb calls this program A Fair Share and it estimates that the $10mm is just 10% of what a home sharing tax in New York State would produce for the city and state governments.

The $10mm in financial support is going to seven organizations. They are:

  • The New York Immigration Coalition

  • New York Mortgage Coalition

  • New York State Rural Housing Coalition, Inc.

  • Win

  • GMHC

  • CSNYC

  • Abyssinian Development Corporation

These are all organizations that benefit from city and state tax dollars but need to tap into the generosity of others to deliver their services.

Take CSNYC, where I am leading the $40mm CS4All private sector capital campaign to bring computer science education to every public school building in NYC. CS4All is

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When Will the U.S. Finally Act Boldly on Paid Family Leave?

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When I gave birth to my daughter over a year ago, I worked for an employer that provides no paid parental leave: the U.S. government. I was able to cobble together vacation and sick time with unpaid leave for four months. But I did not feel ready to go back to work, physically or emotionally, until my daughter was closer to seven months old — when she was sitting up, investigating new toys, eating pureed solids, and getting ready to scoot around her daycare room.

It is time for the U.S. to join the rest of the developed world in providing paid parental leave. Politicians on both sides of the aisle are finally starting to recognize that the current system places American parents in an impossible position. None of them would provide what I think is adequate: six months of paid leave per parent. (Six months

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Regulating and Legislating Tech and Tech Companies

More and more of the news around tech these days is about the relationship between technology companies and government. That was not the case a decade ago when regulators and elected officials took a largely hands off approach to technology, particularly the Internet, web, and mobile.

While I am not a fan of many of the moves that regulators and elected officials have made over the last few years, including the NYC City Council’s recent bills to clamp down on home-sharing and ride-sharing in NYC, I do believe that the tech sector and tech companies must engage with the public sector and they must do it earlier in their development.

It is hard to be an advocate for the tech sector and tech companies with the public sector, a role I play fairly regularly, when the companies in question have not been the best actors themselves.

The good news is

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Landing Amazon HQ2 Isn’t the Right Way for a City to Create Jobs. Here’s What Works Instead

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Amazon’s highly visible search for a second headquarters has offered one tremendous public benefit: it has raised public awareness of what bad economic development is. Even Saturday Night Live satirized the lengths to which local officials will go to woo a major company, which include offering massive amounts of taxpayer subsidies, despite dubious economic returns.

But if attracting Amazon and other companies is not the right way to create jobs, then what is?

To start, it’s easy to understand why local leaders pursue these business attraction deals: economic development is routinely mayors’ top policy priority, as new jobs can boost local employment rates, raise residents’ incomes, stabilize city budgets, and revitalize distressed neighborhoods. Landing a flashy new business headquarters is great PR, a highly visible way to show that leaders are directly helping local economies. This leads state and local governments to spend an estimated

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Want Less-Biased Decisions? Use Algorithms.

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A quiet revolution is taking place. In contrast to much of the press coverage of artificial intelligence, this revolution is not about the ascendance of a sentient android army. Rather, it is characterized by a steady increase in the automation of traditionally human-based decision processes throughout organizations all over the country. While advancements like AlphaGo Zero make for catchy headlines, it is fairly conventional machine learning and statistical techniques — ordinary least squares, logistic regression, decision trees — that are adding real value to the bottom line of many organizations. Real-world applications range from medical diagnoses and judicial sentencing to professional recruiting and resource allocation in public agencies.

Is this revolution a good thing? There seems to be a growing cadre of authors, academics, and journalists that would answer in the negative. Book titles in this genre include Weapons of Math Destruction, Automating Inequality,

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If the U.S. Gets into a Trade War with the EU, It Will Lose an Ally in Pressuring China

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The European Union’s recent announcement that it is preparing to retaliate if the Trump administration imposes tariffs on EU-made autos leaves no doubt that EU-U.S. cooperation on global trade will be compromised for some time if the tariffs go into effect. Besides whatever damage the conflict could do to U.S. jobs, industry, and consumers, this conflict will jeopardize essential allied collaboration to confront Chinese state capitalism, the underlying cause of much of the current trade conflict. When EU President Jean-Claude Juncker visits Washington on July 25, the administration should use the visit to find ways to step back from this precipice.

The primary tool of China’s industrial policy is subsidies to state-owned enterprises (SOEs) for key industries such as robotics, advanced computers, and electric vehicles. SOEs receive preferential access to land, finance, telecom, hydrocarbons, and electricity. They enjoy lower taxes and selective anti-trust enforcement to

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How U.S. Law Needs to Change to Support the Self-Employed and Gig Economy

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If we were designing a labor market from scratch today, it’s unlikely we’d create one that rewards only full-time employees. It wouldn’t make sense given the many ways that people choose to — or must — work: independently, part-time, on the side, as a contractor or freelancer, or on-demand. An estimated 30-40% of today’s workforce are self-employed either part- or full-time, and the numbers are only expected to grow. If we were designing a labor market today, we’d create a system that supports everyone who works.

Yet, in the U.S. our tax and labor policies reward full-time employees in full-time jobs, and penalize everyone else. We have created a labor market that funnels workers to a singular destination: the cubes and office parks that are the mandatory encumbrances of a full-time job. Those who deviate from this path, whether by choice or circumstance, are taxed additionally, then stripped

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Opportunity Zones

I was at dinner with my friend Stephen a month or so ago and he was bending my ear about a provision in last year’s tax bill that provides very significant tax incentives to invest in businesses or real estate in certain locations around the US that have been underinvested in.

It all sounded way to good to be true and I kind of ignored him. This sort of thing has been part of so many economic development plans over the years that it sounded like more of the same to me.

We had dinner again last week and he started in again, but this time we were with some other friends and they chimed in.

It turns out the tax incentives are as generous as my friend said and what seemed to me to be too good to be true is in fact true.

These locations are called Opportunity

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a16z Podcast: The Regulatory Landscape for Crypto

What’s going on, regulation-wise, in crypto? How should people who want to join a company or build something new in the space think about the regulatory environment? What to make of all the headlines, or the “alphabet soup” of agencies …

When India Killed Off Cash Overnight

Bhaskar Chakravorti, the dean of global business at The Fletcher School at Tufts University, analyzes the economic impact of India’s unprecedented demonetization move in 2016. With no advance warning, India pulled the two largest banknotes from circulation, notes that accounted for 86% of cash transactions in a country where most payments happen in cash. Chakravorti discusses the impact on consumers, businesses, and digital payment providers, and whether Indian policymakers reached their anti-corruption goals. He’s the author of the article “One Year After India Killed Off Cash, Here’s What Other Countries Should Learn From It.”

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Airbnb and NYC

There is a bill in front of the NYC City Council called Intro 981 that will impose reporting requirements on Airbnb and their hosts in NYC. There will be a public debate on that bill this coming week.

The backdrop here is the growing housing affordability crisis in NYC and the idea that Airbnb is a significant contributor to it.

While I am not an expert in the economics of housing, I have lived in NYC for the past thirty-five years (my entire adult life), and my wife and I are also landlords in several of the neighborhoods in Brooklyn where rents have been rising most quickly. I have a layman’s understanding of the issue and an on the ground feel for it.

It is my view that we have a fundamental supply and demand problem at work in the rapidly gentrifying outer boroughs of NYC (most acutely in Brooklyn,

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When Did the U.S. Stop Seeing Teachers as Professionals?

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Teachers have had enough. Since March, schools in West Virginia, Oklahoma, Kentucky, Arizona, Colorado and North Carolina have either been shut down or turned into sites of resistance. In Kansas, teachers are threatening to strike because their legislature continues to fund schools at a level the state Supreme Court has deemed unconstitutional. One Brookings Institute analysis projected that teacher actions could spread to another 11 states.

Poor pay, increased health care costs, and diminished pension plans are certainly core issues — teachers in Oklahoma haven’t received a pay boost in a decade. But these problems alone aren’t driving the protests. In every state where teachers have recently gone on strike, demands for increase school funding have been made. Disinvestment in schools has also been central to teacher strikes that have occurred since 2011, in Jersey City, Philadelphia, Chicago (twice), Seattle, Portland

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The Parent Child Relationship

It is fathers day today. And I thought I’d write a bit about something that is really bothering me.

I’ve come to terms with a lot of what is going on in the US federal government and our political system. I see it as a natural swinging of the pendulum. Many on the right think we went too far left under Obama. Many on the left think we have gone too far right under Trump. In time, Trump will be history and we will undo all of this nonsense he is putting in place. So is the way of politics and government and every time something happens in DC that bugs me, I think “this too shall pass.”

But, this policy of separating children from their parents at the border really bugs me. The NY Times has a good report up on their homepage right now about how we got

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What Trump’s Trade War Could Mean for the WTO and Global Trade

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U.S. trade policy is roiling markets. At the end of March, the U.S. stock market tumbled 700 points in a single day on news that President Trump would impose tariffs on Chinese exports. A degree of volatility and uncertainty has continued since then as the tariffs continue to make news. Canada, China, Europe, India, and Mexico are all preparing to retaliate.

There are actually two sets of tariffs wreaking havoc at the moment. The first, on steel and aluminum, came under Section 232, a provision under the 1962 Trade Act that allows the president to protect U.S. industry for national security reasons. The second, on Chinese exports, was triggered under Section 301 of the 1974 Trade Act, a “unilateral” measure not used in decades. Taken together, these tariffs have baffled businesses, created uncertainty at home and abroad, and sown doubts about Washington’s commitment to free

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