COMMENTS ON OVERALL SCORE
What makes an annual report score 100 points in this category:
The “Wow” Factor. As mentioned earlier, an annual report succeeds when it convinces readers to reassess their personal interpretation of a company, its brand, and future. It should create an emotional connection between investor and organization—a vision that can be shared and a passion within the company that can be felt.
While it’s by all means impossible to score 100—and becomes increasingly difficult as budgets shrink—a lot can still be done simply with thoughtful consideration of what will create the most compelling story for readers.
Many investors don’t track their companies as closely as some PR pros might expect. That’s why it’s critical for annual reports to assume that a reader has an 11th grade education and that’s about it. Everything else needs to be clearly explained (MD&A excepted) in lay terms.
We’re Important. Even in the most obscure industries, companies are important. A company should never apologize for the business it’s in and instead wear the mantle of its trade proudly. This should be evidenced with significant content oriented toward discussing the change the firm creates for customers. All companies are enabling something for their clients, and all companies have some point of differentiation—otherwise, they’d cease to function and exist.
It’s in capturing this story—the capabilities that a company creates for others through its products and services—that annual reports transform from a regulatory disclosure to a key element in a company’s communications arsenal. And it’s through the story of how the company will enhance those capabilities that investors, employees, and other stakeholders get excited about the company they’re involved with.
Trends we noted this year:
An Excellent Annual Report. The bar is rising overall—more and more reports are really of very good quality. We don’t know whether this foretells consolidation in the report production business or whether more companies are skirting in-house produced reports, but more and more firms are “getting” how to make good reports. The majority cover many major bases that a reader would look for and provides a lot of data and insight for readers to consider. Further, the books are becoming more “honest”—readers sense that the company’s story isn’t being over-polished, and tangible paths that the company will take to grow in the years ahead are being provided.
What’s the Call to Action? One question we like to ask after reading an annual report is what impulse or call to action we feel from various stakeholder perspectives. Many more books are looking to answer that question from a variety of fronts.
As potential clients, do we feel that the company is focused on building a close relationship with us. As prospective shareholders, are we strongly convinced that the firm is a very serious, profit-oriented business with a firm grasp on its industries and the opportunities they present.
As hypothetical community members and employees, we want to learn that an organization has its act together and that we’re part of what’s central to the organization’s focus. Often this can come across as an afterthought. We would like to read about how a company believes in the importance of fostering internal talent and ‘giving back’ to the community in which is conducts business.
Let the Clients Shine. A company’s expertise is often demonstrated through an annual report via the scope of businesses it manages and its reach. The appeal very much is oriented toward the left side of the brain—something especially unusual from companies grounded in creativity. We’d love to see more content that talks about the spark and passion behind a firm—how there’s a drive to champion the energy needs of its clients and how a company lifts its customers to a new level. While such content is relatively predictable and expected from readers—and thus is not as ‘creative’ as developing a book focused on the logical and cognitive—it is still nonetheless needed. It helps shareholders know that the company’s attention to detail means that the smallest client with the smallest project gets the same level of care and quality service as the big guys of the region.