Employers’ groups have welcomed Gordon Brown’s decision to reopen discussions on Operating and Financial Reviews (OFRs), just nine weeks after he promised to scrap the company reporting regulations.
The OFRs, under which listed companies were required to produce a forward-looking annual statement on aspects of the business including employee concerns, were scrapped by the chancellor in November in a bid to highlight the government’s commitment to cutting red tape.
But the decision backfired, with business groups claiming the move was “baffling”, and would damage HR’s bid to boost its credibility. Employers also complained that they had spent millions of pounds preparing for OFRs, which were to be replaced by a ‘business review’.
A consultation on those replacement rules was due to run to the middle of this month. But the government has now agreed to widen this consultation to allow comments on issues such as social, community, employees and environmental matters.
The consultation will run until 24 March, with the government intending to incorporate the new reporting rules into the Company Law Reform Bill, currently going through parliament.
Duncan Brown, assistant director-general at the Chartered Institute of Personnel and Development, said he was hopeful the government would listen to employer concerns over a lack of clarity in the proposals.
“The extra consultation time suggests that the government is willing to listen,” he told Personnel Today. “It needs to be clear about what it is doing as employers are unclear about what information they have to include. As long as we end up with a single piece of regulation that requires companies to mention employees in a forward-looking statement, it does not matter whether it is called an OFR or a business review.”