Integrated reporting and new ways of branding annual reports
Traditionally a company’s annual report has been a statutory document, to disclose their business activities. It’s the focal point of corporate reporting, providing vital information to investors, about the company’s past and current performance. Typical content includes; the business model, strategies for growth, risk analysis and market position. Thus far, the annual report has been an essential tool for the investment community, to evaluate the investment potential, amongst a growing number of opportunities. The format has been in place for decades, but is quietly undergoing some radical changes.
Introducing integrated reporting
In recent years the International Integrated Reporting Council (IIRC), has formed a global coalition of regulators, investors, accounting professionals and NGOs. The coalition seeks to improve reporting with more focus on value creation, and are working to make this a standard practice for all corporate reporting. Download our e-book on branding company reporting.
Some companies remain sceptical and view their annual report as a necessary evil to meet their obligations. However, many businesses now have a broader sense of creating value, they recognise that short-term incentives, only reward short-term investment, making the capital markets weaker, and creating a loss of faith in the corporate world. These companies embrace integrated reporting, and are developing their annual reports into a dynamic channel, to engage with all their stakeholders. They relish the opportunity to show how they create value in all aspects of the business, and see it as a way to build a close, positive relationship on a long-term basis.
“The integrated reporting concerns itself with a more open presentation of the business throughout.”
Demonstrating value to investors
The traditional strategic report is a standard template for the information required to help investors evaluate a business. It contains the Chairman’s Statement, business model, strategy, objectives, KPIs etc. However, integrated reporting takes a more rounded view of a company beyond the mandatory demands of the strategic report. It elaborates on details such as distribution of capital, to help investors make a more informed choice. Integrated reporting recognises, that culture is an important factor to demonstrate the company’s human capital and ability to deliver. The modern business has many areas that contribute to success as a whole, from financial, to manufacturing, human resources to sustainability. Integrated reporting offers this information, often including the leaders responsible for the governance of these areas, and the accountability they hold. Ultimately, integrated reporting concerns itself with a more open presentation of the business throughout. It portrays a consistent and detailed story of how a business creates value, in the short-term and the foreseeable future. I can see why some communication officers, might become jaded with the yearly routine of publishing their annual report, assuming that the numbers speak for themselves. Yet, despite the regularity, it should never be underestimated how important the report is for investors. You can have a solid financial performance, but in a stable economy the investment community are spoilt for choice. If you don’t get their attention you won’t be considered, despite the potential for a strong ROI. Investors are looking for companies who are open and transparent. They want to see that the leadership team has a strong strategy, relevant to the nuances of their market. They want integrity when it comes to risk assessment, and reassurances that the business model and strategy will succeed. Non-financial indicators such as brand-strength, are becoming a useful gauge for investors to evaluate a company’s connection to its stakeholders. They want to establish if a business can leverage their brand to yield success. Incorporating these broader topics, provides a clear, concise and compelling story for the investor, who often has to make a recommendation, to other prospects.
Demonstrating value to all stakeholders
Equally, the annual report is no longer for investors only. As businesses increasingly depend on strategic partners, the integrated annual report, helps partners evaluate a potential alliance, gauge financial performance and stability. Ultimately it provides a better understanding of fit. Thus, minimising the risk of time and resources, wasted on forging an alliance, only to do an embarrassing u turn. An integrated reporting approach, helps external stakeholders such as; the media, government and lobbyists, to make a more perceptive judgement of life behind the doors of your business. This enables them to make a more accurate and fair representation, of your company, in the absence of your involvement. Finally, one of the most important and often overlooked audiences are the staff. They are often too distant, to understand the workings of the company they’re a part of. But nevertheless, they would like to be informed. It goes without saying, the more effort you put into informing and inspiring staff, the more motivated they will become. Which will naturally have a profound impact on the overall strength of your business.
Demonstrating value to investors
I can see why some communication officers, might become jaded with the yearly routine of publishing their annual report, assuming that the numbers speak for themselves. Yet, despite the regularity, it should never be underestimated how important the report is for investors. You can have a solid financial performance, but in a stable economy the investment community are spoilt for choice. If you don’t get their attention you won’t be considered, despite the potential for a strong ROI. Investors are looking for companies who are open and transparent. They want to see that the leadership team has a strong strategy, relevant to the nuances of their market. They want integrity when it comes to risk assessment, and reassurances that the business model and strategy will succeed. Non-financial indicators such as brand-strength, are becoming a useful gauge for investors to evaluate a company’s connection to its stakeholders. They want to establish if a business can leverage their brand to yield success. Incorporating these broader topics, provides a clear, concise and compelling story for the investor, who often has to make a recommendation, to other prospects.
Approaching through integrated reporting helps external stakeholders such as the media, government and lobbyists to judge life behind the doors of your company in a more observant way. This enables them to have a more accurate and fair view of your company.
I also want to remind you of an important and often forgotten audience, namely the employees. They are often too far away from the management to be able to understand the work that takes place in the company of which they are a part. They still like to be informed. It goes without saying that the more effort you put into informing and inspiring the workforce, the more motivated they will be. Which of course will have a significant impact on the overall strength of your company.
Designing for integrated reporting
Optimal design is absolutely essential when it comes to bringing the integrated reporting to life. The increased amount of content requires a structure and pedagogical approach to organizing the information. Smart design makes it easier for people to understand the main direction of the company, and also to find the details they may need. It is also important to write well by expressing your message in a tone of voice that shows your personality, while being concise enough to attract readers and be positive about your company. The right typography will bring the story to life, making it easier to navigate and understand. Last but not least, quality photography is the most tangible way to show your readers the world, feel the culture on the pulse, and meet the people in the company. The award-winning annual report jobs Mission has done for EVRY's financial reporting have helped them show the world the story of how the company conducted its successful turnaround operation. We helped them lay the foundation for one of the strongest IPOs on the Oslo Stock Exchange in the last five years.
“Allowing companies to reach a wider audience and establish a deeper, longer connection with audiences that are vital to its success.”
The progression of digital reporting
More companies are turning to digital as a means of delivering their corporate messages. Some are happy to provide a pdf version of the printed format to download. Whilst others are embracing digital platforms, exploiting both online reporting and social media. This creates a more dynamic experience through interaction, sound, motion and video. But digital is also easy to update and distribute. Providing a reporting stream, making information transparent and available at the click of a button. There’s a skill to on-line reporting, you have to pitch the experience at the appropriate level to your audience. And if the on-line strategy is managed well, it can create a two-way street, providing you with the data to evaluate the interests and habits of your readers. So far, online reporting has been secondary to the printed version, but as more people become on-line natives, this will undoubtedly change. The way we receive information is evolving, we no longer seek out brands, they now have to come to us, in in the channel of our choosing. Digital is an excellent way to make a company available, keeping all stakeholders up to speed and close.
These are exciting times for corporate reporting. What was up until recently, seen as a somewhat tedious obligation, is now seen as a powerful opportunity, to demonstrate the true qualities and full potential of a business. Allowing companies to reach a wider audience and establish a deeper, longer connection with audiences that are vital to its success.