Annual reports are a company’s most-requested and most-read communications but they have a bad reputation for being dry and boooring. They can be full of jargon and legal speak. But while the proxy rules require all publicly traded companies file annual reports with the SEC, they do not require the information be delivered in the same sleepy fashion year after year.
I have been thinking a lot of about how to better leverage the annual report as a vehicle to share the vision, strategy and culture of a firm. Of course, I turned to corporate reporting expert, Barbara Koontz, Senior VP of Customer Experience, at Curran & Connors, who is a veritable wizard when it comes to helping companies design annual reports that stakeholders actually want to read.*
Because I have learned so much from Barbara myself, I asked her to share some of her insights with you. And she graciously agreed to answer my questions here (edited for length).
Q. Annual reports can be a strong tool to communicate past results, as well as future vision. What do you see as best practices to help the annual report tell an organization’s story?
A. There are several steps that a company can take here to convey its unique vision and values:
1. Use the CEO letter to your advantage: The opening letter to shareholders is still the most widely read section of the annual report. Companies use it to communicate vision, strategy, values, and thought leadership. The letter often focuses attention on recent initiatives that helped achieve corporate goals. Easy-to-read graphics or pull quotes ensure accomplishments stand out. The letter also is an opportunity to reinforce long-term, future goals and demonstrate industry standing.
2. Use video to convey personality: For online annual reports, the use of video is becoming more prevalent. A well-produced, short video is a great complement to the letter and conveys a CEO’s excitement and passion. To increase effectiveness and maximize return on investment, report videos are often directed to all stakeholders so they can also be used for other marketing endeavors.
3. Relate company performance to market trends: In general, it is important to balance company activities against 5 to 10 year market trends. This helps to justify investment in those key growth areas.
Q. Do you see organizations changing their approach to the annual report to express their corporate culture?
A. One of the biggest changes and most successful ways I see companies reflecting their culture is by showcasing employees. Companies incorporate stories, case studies, and photography that emphasizes the efforts of staff in helping the organization realize corporate goals.
We see video playing a key role here as well. A compelling video celebrating the passion and success of staff shows that the company values the contributions of its people, which in turn, results in employees wanting to work harder for their employer.
What may seem like a minor detail at first, the photo of the CEO, also can say a lot about the company’s culture. A suit says “traditional” “established,” and “leader,” while a shirt and slacks says “approachable,” “entrepreneurial,” and “partner.”
Q. Many different stakeholders use an organization’s annual report (investors/donors, media, regulators, customers). What advice do you give to companies to help them make their annual report accessible across multiple stakeholder sets?
A. It is important to design and develop content with all audiences in mind, as well as other communications vehicles that may be used to repurpose and more widely distribute elements from the annual report. When Curran & Connors develops a reporting solution, we consider the different ways the report or aspects of the report will be used as well as the target audiences.
Having said that, no document or reporting vehicle can be all things to all people. So, understanding your primary audience is important. Let’s say the main audience is the institutional investor. In this case, the report should be designed to ensure transparency and clearly communicate data, results, and a pathway to success.
Potential business partners, employees, and community members will also be interested in these metrics, but to effectively reach those groups the information may need to be presented differently. So, you will want to make the information more reader-friendly by applying relevant techniques such as infographics.
In addition, making the information available online is a sure way to make it more accessible to a larger audience. The content can connect to and be connected from a number of digital channels.
Q. An annual report can be a significant expense for many organizations, how do you recommend that companies increase their ROI and extend the reach of their annual reports beyond posting online and sending to shareholders/donors?
A. The two best ways to leverage the investment of your annual report are:
1. Think of the annual report as your “financial brand” for the year: Repurpose the look and feel into other communications documents such as fact sheets, the proxy, quarterly reports, the investor deck, and the IR website. This increases the value of the report and shows a professional and consistent approach to your overall communications.
2. Design the annual report to be easily segmented: Design the annual report in such a way that the segments of the book or online reporting vehicle can be shared via other marketing channels, such as social media. A unique graphic, custom photo or video, and/or case study that ideally conveys a key value driver can satisfy the never ending need for content for your social platform.
Q. As you look ahead, what are you most excited about for the future of annual reports?
A. Annual reports are one of the few documents that tell a company’s overarching story. What’s exciting is how these stories evolve to tell much more than how to reach a targeted bottom line. There is significant interest, for example, in learning about a company’s environmental, social, and governance (ESG) practices and how these impact the sustainability of the business.
Millennials are driving companies to be more involved in their communities and to report on these activities. Social media is forcing companies to be more transparent and have more conversations than monologues. Leaders of companies are taking more of an interest in the narrative too, which leads to more engagement across all platforms. As stories evolve, so do their formats.
Thanks for these words of wisdom, Barbara!
As you prepare your company’s 2017 annual report, rather than looking at it as just another federally mandated hoop to jump through, why not seize the opportunity to turn your annual report into a valuable messaging tool?
Audacia Strategies can guide you through creating a comprehensive communications strategy… including annual report messaging! Let’s talk!
*NOTE: This is not a sponsored post. I just happen to think that Barbara has great perspective on this topic!
Photo credit: andreypopov / 123RF Stock Photo