Nearly half of companies producing an OFR

News Article - 22 August 2006
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Around half of UK businesses have produced an operating and financial review (OFR) even though it is no longer mandatory.

Corporate reporting firm Black Sun found that 48 per cent of companies have opted to produce an OFR, despite Gordon Brown's decision in November 2005 not to make it mandatory.

The firm said that the results of the poll illustrated that the government's decision to cancel the OFR has not stopped the move towards greater transparency and best practice behaviour in narrative reporting.

Most businesses not issuing an OFR were using a Business Review format for their disclosures.

David Christopherson, managing director of Black Sun, said that companies were responding to new concerns over reporting.

"The chancellor's decision to abolish the mandatory OFR resulted in significant uncertainty, but this has created opportunities for companies to use strong reporting as a source of competitive advantage – particularly in a global economy where high standards of disclosure establish trust with the capital markets, investors and other stakeholders," he said.

"There is increasing pressure on many companies for more meaningful disclosure. Whether called an OFR or Business Review, the annual report is turning into a strategic positioning document with investors."

Earlier this year, research conducted for the Investor Perceptions Study 2006 found that 78 per cent of analysts and investors still wanted companies to produce a full OFR. 

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