The IR Magazine Reporting & Disclosure report paints a picture of how this important part of good governance and investor communications is evolving. For example, nine in 10 companies have an online version of their annual report available, while 78 percent continue to provide a printed version.
But for Scott Payton, managing partner at Londonbased online corporate communications company Bowen Craggs & Co, this is something that will change. ‘I really think the days of printed annual reports are now numbered,’ he tells IR Magazine. ‘Bayer, the German pharmaceutical and life sciences firm, stopped producing a printed annual last year, and I expect many more corporate giants to follow. Moving away from print allows a company to send a positive environmental message – as well as saving on print and postage costs.’
Just over a quarter of companies provide an interactive PDF, reveals IR Magazine’s research report, with European and smaller firms less likely to print their annual report. Nearly half of mega-cap companies make an interactive version of their annual report available, in line with what Payton advises.
‘For PDF versions of annual reports, we suggest that IR teams ensure the contents page is comprehensively hyperlinked,’ he says. ‘This makes it much easier for investors and analysts to quickly jump to relevant parts of the report when they’re viewing it on screen.’
More than two thirds (68 percent) of the investment community surveyed find online annual reports to be very useful, while 33 percent feel the same way about interactive PDFs. Printed reports are much less popular, with only 13 percent of respondents finding them very useful, and 35 percent saying they’re not useful at all. Only 7 percent find embedded videos very useful.
‘The research shows investors and analysts have little interest in embedded videos in online reports,’ notes Payton. ‘But this doesn’t necessarily mean other audience groups – such as jobseekers, customers and potential business partners – won’t find them interesting. And it’s important to remember that the audience for online annual reports reaches far beyond the investment community.’
Andrey Kozhevnikov, CEO & founder of Zebra Corporate Communications, a company focused on digital reporting, offers a simple but effective insight into the reporting approach: ‘I believe a great potential can be unlocked by infographics and/or charts – it makes reading much faster.’
When asked to rank six different goals for reporting during the next three years, the respondents clearly articulate the desire to build a clearer link between strategy and financial results. This is the main reporting priority for 45 percent of respondents, and ranks in the top three for more than three quarters (77 percent).
The most common non-financial KPIs that companies report on are employee-related factors, closely followed by environmental and governance-related indicators; globally, the majority of companies report on KPIs relating to these issues. On a regional basis, customerrelated KPIs are most likely to be reported on in Asia. Most European companies report on health and safety, compared with just 26 percent of North American firms. And almost three quarters of Asian companies report on governance-related KPIs.
Increasing reporting around ESG issues is cited as an important goal for future reporting, according to the report. ‘There is a large and growing community of investors that rely on company-published ESG data to inform their stock selection,’ Cas Sydorowitz, global head of activism and M&A at advisory firm Georgeson, tells IR Magazine. ‘This is not a passing fad but a fundamental shift in the key metrics a company uses to identify material risk.’ n
The full Reporting & Disclosure report is available to IR Advanced and IR Intel subscribers to IR Magazine and can be found at IRmagazine.com/reports-library.
This article was published in the Winter 2019 issue of IR Magazine.