When both company bosses and fund managers agree that quarterly earnings forecasts harm US business it is time to listen. The Business Round-table Institute for Corporate Ethics and the CFA Institute say in a new report that the practice "leads to the unintended consequences of destroying long-term value, decreasing market efficiency, reducing investment returns, and impeding efforts to strengthen corporate governance". None of those consequences is good.

The investment community has, in effect, been asking companies to lie to them four times a year. Few investment projects deliver a return inside three months. Investments by an oil company in a new production field take decades and a quarterly forecast means nothing. What is worse, as any schoolboy will tell you, is that lies once told are not forgotten. Quarterly forecasts can only be met if a company is managed toward them. Pressure to hit quarterly numbers is one factor behind the culture of lies that devoured Enron.

It would be unfortunate, though, if efforts at reform made companies less open and transparent. Financial markets breathe information and forward-looking information is especially pure oxygen. Reform that increases investors' uncertainty over corporate prospects would harm investment returns just as surely as quarterly guidance. Nor should formal guidance be replaced by unofficial numbers, delivered to a favoured analyst over an expense account lunch. Privileged access to information was a feature of the dot-com era now rightly discarded.

Rather than starve the markets of information, companies should think afresh about what guidance best reflects their business, and how they give it. Investors want to know how much oil Shell will produce in 10 years' time. They want to know how Microsoft will deal with the competitive threat from Google. From small technology companies, however, which need to raise more capital, they want regular information about prospects. It is short-term guidance, not forecasting hard numbers, which causes the problem. In Japan, not known for a short-term outlook, all listed companies must forecast their turnover and profit for the year ahead.

The victims of scrapping quarterly guidance will be the financial journalists, sell-side analysts and hedge fund traders who profit from the use, abuse and interpretation of news. Their hunger for information has made it hard for any company, particularly a small company, to unilaterally end quarterly guidance, when it knows that doing so will mean less media coverage, less analysis and less liquidity in its shares. Companies have to be careful that stopping quarterly guidance is not seen as an attempt to cover up bad news.

Now, though, US corporations have the opportunity to guide their investors in a new direction. It is an opportunity they should embrace.