LONDON, Nov 28: Investors criticized British Finance Minister Gordon Brown’s retreat on toughening company reporting requirements on Monday as a setback for improved transparency on corporate risks. Brown announced on Monday that companies would not have to implement a so-called Operating and Financial Review (OFR), which had been set to become mandatory from April 2006, and which business leaders had criticized as an onerous burden.

The OFR would have required companies to detail future strategy and risks, including non-financial information, but the disclosure will now be voluntary.

We were surprised and disappointed with this move, said Anita Skipper, the Head of Corporate Governance at Morley Fund Management, which has 148 billion pounds ($253.1 billion) in assets under management.

We feel this is a missed opportunity for companies to give shareholders the long-term view of their strategy, risks and opportunities. The OFR would have given companies the opportunity to educate, explain and persuade.

The requirement to include non-financial information had been seen as pressuring companies to respond to increased stakeholder interest in issues such as pollution and health and safety.

Bringing financial and non-financial information together would have given shareholders a clearer overall picture,” said Mona Patel, spokeswoman for the Investment Management Association (IMA). We feel a well-drafted OFR supplied information that shareholders need.

The U-turn follows a delay to implementation of the OFR to 2006 from 2005, announced a year ago by former Trade Secretary Patricia Hewitt.

Monday’s move appeared to jar with the recent stance of the UK’s Department of Trade and Industry (DTI), which two weeks ago organised, as part of its EU Presidency, a European corporate governance conference focused on forcing companies to disclose more information to their shareholders.

But the DTI and Treasury had worked together on the decision, a DTI spokeswoman said.

It’s a fast-moving situation. I know the secretary of state (for trade and industry, Alan Johnson) has worked with the chancellor (Gordon Brown). It was agreed with Alan Johnson.—Reuters