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FTSE 100 companies producing OFRs despite government cancellation

Written by Richard Northedge
Wednesday, 07 March 2007
Almost half of all FTSE 100 companies are producing OFRs – operating and financial reviews – even though the government controversially cancelled their introduction in 2005. A report from The Centre for Tomorrow’s Company, a corporate think-tank, found 48 of the country’s largest 100 quoted companies have chosen to go ahead with this narrative presentation of their accounts. OFRs were cancelled in November 2005 by chancellor Gordon Brown on the brink of their introduction, even though the Department of Trade & Industry had been championing them for seven years. Although companies had initially opposed the change, they expressed annoyance that the new reviews were cancelled after so much work had been spent preparing for them. Companies need now provide only a less demanding EU Business Review but the director of the Tomorrow’s Company, Mark Goyder, says the fact that so many big businesses still describe their annual report as an operating and financial review shows that companies have derived tangible benefits from the proposal. “We have long believed that the discipline of inclusive reporting is a spur to better government and better decision-making, which benefits shareholders and ultimately customers in the marketplace,” said Goyder. “The evidence now suggests that nearly half of FTSE 100 companies share faith in the rigorous methods implied by the OFR. “Thankfully after a difficult period of confusion and misunderstanding for most companies, the UK corporate reporting ‘smoke’ is now beginning clear. Despite the meanderings of government, many companies have taken in much of what was included in the OFR and taken positive steps towards greater narrative reporting.” For more information, please visit: www.tomorrowscompany.com