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It’s not about what next but who next

Listed entities, regulators and wider industry experts perpetually debate the actual need for an annual report. Let’s end that debate now.

By Nick Rose  | Director | Head of Reporting Communications

Listed entities will always legally be required to communicate its financial results at year-end. As part of that, all your audiences with a vested interest will need commentary explaining what the numbers mean.

More than just numbers
The narrative section of the annual report has increased to over 60% of the annual report, highlighting increased recognition that the income statement and balance sheet in isolation do not tell the whole story.

FleishmanHillard Fishburn’s recent research ‘The Dying Days of Spin’ has revealed:

  • 76% consider a company’s ESG commitments before deciding where to work

  • 87% believe the success of a business should be measured by more than financial performance

  • 80% have stopped using products and services of a company because its response to an issue did not support their personal views

With 80% of corporate value reliant on intangible assets such as intellectual property, customers and the company’s brand, the debate should not be about the future of the annual report but how we communicate this story to the next generation of analysts, investors and wider stakeholders.

By 2025 millenials will make up 75% of the world’s workers.

By 2025 millenials will make up 75% of the world’s workers.

The next generation
By 2025, ‘millennials’ will make up 75 per cent of the world’s working population. They have higher expectations of companies to communicate their approach towards tackling societal issues, articulate purpose, demonstrate their investment thesis, improve governance and show financial stability.

And our research agrees. 84% of millennials believe sustainable investing has increased in importance.

Although the next generation of analysts, investors and wider stakeholders will still need annual reports, what they’ll be looking for is different – they live their lives online so will demand greater accountability and clarity in the communications they receive.

Future-proofing the report
In the future, annual reports will be shared in a variety of formats. From senior management sound bites through key facts and figures infographics to operational and community project videos across Twitter, LinkedIn, Instagram, Facebook and YouTube.

It is not easy to digest 250+ pages of content in one sitting and outside of institutional investors and analysts, most audiences find it a challenge to digest a financial report of any length. Breaking content up into bite size chunks also helps to build an ongoing conversation with stakeholder groups over the course of a year.

Some topics are challenging enough to understand, especially when mired in industry jargon and detailed content. The simplest way to increase engagement is through video. LinkedIn introduced video for company pages this year and saw engagement levels increase five-fold by comparison to other content.

A talking head of the CEO is a staple of an online report, but is this necessarily the right person? To increase the breadth of audience and give your communications real stature, it should be employee-led not senior management-led. This increases your company’s reputation and demonstrates your culture. It is also who your employees resonate with more readily and believe more quickly.

Steps to succeed
There are three simple ways to increase the use of your company’s social media channels to successfully promote your annual report:

  1. pre-package your annual report content and decide what the key messages are that you want to share – financial as much as operational and sustainable performance;

  2. make your approach employee-endorsed; if they share the content across their social channels it carries more weight than being purely company-led; and

  3. ensure your social media channels are audited regularly to maximise the use of your content across all channels.

The annual report will still be a key corporate piece of communication when Generation Z (the generation following on from the millennials) are at the senior management table of listed organisations, so make it accessible now rather than wait until it is their turn.