A consortium of investor groups has called for the government to provide
strong incentives for companies to follow voluntary guidelines on producing an
operating and financial review.
In a response to the consultation on the Treasury decision to scrap the OFR,
which closes today, a group of 27 bodies representing investor interests said
that the government should make clear to companies that they ‘should be striving
to report using the framework set out in the Accounting Standards Board’s
reporting statement’. The statement was initially established to provide some
rules for producing a mandatory OFR.
The group also called for the concerns over director’s liability when making
forward-looking statements to be addressed. ‘We acknowledge strong support in
some quarters for a “safe harbour” provision to address this issue, but are also
fully aware of concerns with this approach and that there may be other legal
approaches to provide directors with sufficient reassurances when providing
forward-looking information,’ said the consortium in a letter to trade and
industry secretary Alan Johnson.
A decision on whether to make further changes to the business review, or to
bring back the OFR is expected to be made in time for inclusion in the company
law reform bill.
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