Exxon Mobil Holdings Chief Financial Officer Neil Hansen is one of thousands of letter writers who submitted comments on a U.S. Securities and Exchange Commission (SEC) proposal that would allow public companies to opt out of current quarterly reporting requirements.

The letter, printed on the oil giant's letterhead,an 11-page signed letter,is notable not only because Hansen is the financial chief of one of the world's most influential companies, but also because of his forceful defense of allowing companies to choose semi-annual reporting, a move that would effectivelyeliminate quarterly reporting requirements that have been in place for decades.

The letter, dated June 24, also draws attention for its full-throated support of the plan. Although he is not the only supporter, his stance stands in stark contrast to thewave of oppositionthat flooded the SEC's portal during the public comment period that ended Monday—opponents, as CFO Dive previously reported, include veteran financial leaders such as former Netflix CFO David Wells.

For his part, Hansen pushed back against the notion that the new system would lead to reduced market transparency. He pointed out that the modern corporate "information disclosure ecosystem" has actually moved beyond the 10-Q form, and investors today can access more timely information through a variety of channels, including investor presentations, webcasts, and earnings releases. He also said existing 8-K forms andRegulation Fair Disclosurerequirements preserve "a channel for communicating material information to the market."

He did not commit the energy company to adopting the semi-annual reporting system, only saying that if the company chose to opt in, it would expect to continue providing quarterly financial disclosures through earnings reports in 8-K filings. At the same time, he predicted the change would bring a "net positive impact" to the company.

"We anticipate a meaningful reduction in the time and effort required of our employees, management, board of directors, and our independent registered public accounting firm in preparing, reviewing, and filing interim reports," he wrote.

Here are five recommendations Hansen made for the SEC to successfully implement the semi-annual reporting framework under consideration:

Ensure the semi-annual reporting system is optional, not mandatory

He wrote that mandating a twice-a-year reporting cadence could have "unintended consequences." Companies vary greatly in size, maturity, industry, and investor base, and it should be up to them to decide whether to switch to semi-annual reports or continue using the 10-Q form. "Investor considerations, rather than regulatory mandates, should largely determine the timing and format of interim reporting," the letter states.

Establish a simpler format for first- and third-quarter financial statements

Hansen suggested the SEC adopt a mechanism that would allow companies opting for semi-annual reporting to submit first- and third-quarter reports under new Item 8.02 of Form 8-K, allowing them to "furnish" rather than "file" these quarterly financial statements. "Unlike a full 10-Q, the proposed Item 8.02 should be carefully scoped to require only condensed consolidated financial statements and incremental decision-useful updates that represent material changes relative to the issuer's most recent 10-K or 10-S, rather than a full refresh of all quarterly disclosures under GAAP requirements," he wrote.

Maintain the "furnish" rather than "file" classification

The SEC should continue to allow companies to publish earnings reports via Form 8-K on a "furnished" rather than "filed" basis. According to a blog post by Austin Legal Group, the two classifications differ in legal consequences: "furnished" information does not expose companies toliabilityunder Section 18 of the Securities Exchange Act of 1934, while "filed" information could trigger such liability.

"The Commission's 'furnish' framework promotes robust and candid disclosure," Hansen's letter states. "That framework encourages issuers to provide timely disclosures, supplemental context, operational insights, and forward-looking information that investors value, but which could be constrained or omitted if earnings reports were required to be 'filed.'"

Allow partial auditor review to be optional

The letter argues that companies opting for semi-annual reporting should also have the right to decide whether to require their independent registered public accounting firm to review the first- and third-quarter financial statements included in their earnings reports. "Giving issuers a choice in this area is consistent with the Commission's goal of reducing compliance burdens while protecting investors through transparency," Hansen wrote.

Allow a quick switch to the semi-annual cadence

If the new twice-a-year reporting cadence is adopted, Hansen believes "no formal transition period is needed" and asserts that one calendar quarter would be sufficient time for companies to prepare for the change. "For example, if the final rule is published and effective by September 30, an issuer should be able to decide, when filing its Form 10-K for the current year, whether to elect the semi-annual reporting system for the next fiscal year," he wrote.