Reporting: new dawn for reporting
Long-winded, paper versions of annual reports may have had their day
THE ANNUAL REPORT is the definitive corporate guidebook, packed full of facts, figures and forecasts, disclosing everything we need to know about the state of a company. They play a vital role in communication, but over the years their size has increased considerably in response to pressures to report more transparently. But, with the advent of the digital age transforming just about everything in business, is it time to review how we communicate with stakeholders?
While not everybody has jumped on the virtual bandwagon just yet, it is only a matter of time before they will have to. Whether we like it or not, things are moving online and annual reports will be one of them. To stay apace with these developments, companies need to start thinking about shifting communications to the web, integrating microsites dedicated to corporate reporting within the overall company website.
As a legal requirement, annual reports are sent to the various regulating bodies and Companies House in a ‘stripped back’ print format. It is only stakeholders that are lavished with a beautifully presented document, but let’s face it, how many of us actually read an annual report cover to cover?
It is this effort and cost associated with engaging with stakeholders that has given way to a new wave of thinking. Obviously, the needs of a FTSE-100 company are going to differ to those of a smaller organisation but, in line with the migration to digital communication, short-form reporting is being hailed as the future. In essence, this is a leaner version of the annual report, highlighting the main areas of the business in an easy to navigate format. ICAS has been championing short-form reporting – or SFR – for some time now and believes it will satisfy the majority of stakeholder questions through these industry changes. The idea is that the full annual review will sit behind the short-form format and anyone looking for more detailed information can request a straightforward hard copy direct from the company or, of course, download it from the microsite.
It can cost up to £30 per head to produce and send a traditional annual report to each stakeholder. Multiply this by how many stakeholders a business has and it doesn’t take a genius to appreciate how expensive it can be. In contrast, being 30 pages or less, short-form reporting benefits from costs savings in design, artwork, print and postage.
But there’s more to it than the bottom line. It is well documented that 50% of a company’s value is tied up in its attributes and brand personality. Intangible assets these may be, but assets they are. Being overt and transparent about the business helps to build trust, so communicating clearly can only have a positive impact on a company’s reputation in the City.
It’s fair to say that annual reports can be daunting due to the sheer volume of information they contain. While communicating that information is obligatory, it is how that information is communicated which is key. Regardless of what we think about digital, there is no doubt it is the state of things to come and as they evolve in their brave new world, annual reports, I expect, will become more sophisticated, focussing separately on the needs of different audiences – shareholders, investors, employees, customers, suppliers, etc. The part the short-form report plays is almost dual purpose: to showcase the company, demystifying corporate activity, almost like a brochure if you will; and supplementing the inevitable full online version. Having a piece of communication that can perform both functions surely has to be worth its weight in postage stamps.
Richard Simpson is group business development director at branding and communication agency Tayburn