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A corporate reporting regulator has warned U.K.-listed companies to rethink the way they give shareholders information about their main risks and uncertainties.

The Financial Reporting Review Panel issued its warning after deciding that too many companies were not complying with their legal responsibilities in this area.

The panel said it had recently “challenged a number of companies,” reminding them that the Companies Act 2006 requires directors to give shareholders an annual business review that describes the “principal risks and uncertainties facing the company.”

The panel can force a company to reissue its accounts if it judges that they do not comply with corporate law. Usually it will approach a company in private, requesting that it changes its reporting practices.

In its warning, the panel listed six areas where it feels companies are making inadequate disclosures:

The company discloses a list of risks, but does not say which ones it thinks are the most significant

The list of principal risks and uncertainties is so long that it is unrealistic to think they can all be principal risks

Risks are described in a generic way, meaning it's not clear how the risk or uncertainty applies to the company

Companies discuss their risk framework rather than their risks

The list of principal risks and uncertainties conflicts with information elsewhere in the report

The disclosure says nothing about how the risks are managed

Panel chairman Bill Knight said: “Any board should be able to describe in their accounts, simply and clearly, the principal risks and uncertainties facing the company. Many boards do this, but too many do not. Boards who retreat behind boilerplate give the impression that they have not themselves understood the risks they face.”

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