Bosses Welcome OFR U-Turn, But Criticise Cavalier Approach to Regulation Policy

28 November 2005

The timing of today's announcement by the Chancellor, that the proposed Operating and Financial Review (OFR) will be abolished, was criticised by the Institute of Directors (IoD).

The OFR was to be imposed on all quoted companies from next April. The IoD said that while it welcomed the reduction in the regulatory burden, to abolish the OFR at this late stage, after many companies had incurred costs to meet the requirements, showed a slap dash approach to regulation policy.

Patricia Peter, Head of Corporate Governance at the IoD, said:

"We are a strong advocate of reducing the regulatory burden on business, and have consistently asked the Government not to gold-plate EU regulations.  However, the OFR pre-dates the EU Modernisation Directive and its scope, complexity and impact is to a large extent the product of the review of UK company law established by this Government.  The IoD recommended that once the Modernisation Directive was agreed the OFR requirements should have been limited to that scope. 

"Making the u-turn now - however welcome - when affected companies will have spent a large amount of time, effort and money (in some cases many millions of pounds) to enable them to meet the requirements of the OFR, demonstrates a cavalier and ill-thought through approach to regulation and its impact."