FTSE100 directors seek safe harbour

Philip Broadley, The Hundred Group of Finance Directors’ chairman and group
financial director at the Prudential, has said he will continue to seek more
legal protection for directors as part of the ongoing consultation on the
withdrawn operating and financial review.

Broadley told Accountancy Age that he hopes to meet with government
officials, before the 24 March closing date for consultation, to press his claim
for a ‘safe harbour’ provision that would shield executives from claims made
against narrative reports that turn out to be wrong.

Britain’s top FD believes directors should not be at risk of compensation
claims if the reports are made in good faith.

‘Narrative reporting would be focused on minimising the legal risk to the
company from reporting, that can be challenged as having suggested events that
did not unfold as the report says,’ Broadley said.

Narrative reporting was included in the OFR as a means of allowing directors
to fully describe the future prospects of companies with more transparency for
their plans.

Consultation is now focused on narrative reporting as a means of replacing
the OFR, which was halted in its tracks during a speech by Gordon Brown to the
CBI in November last year.

The chancellor described the move as an effort to reduce red tape.

However, Brown’s decision was widely criticised, with Friends of the Earth
seeking a judicial review of the consultation process.

The review was headed off by the government agreeing to the current
consultation.