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 thier financial results at year-end. And as part of that, audiences will always need commentary to explain what the numbers mean to them.
More than just about 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.
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.
The next generation of analysts, investors and wider stakeholders will still need annual reports, but this group of individuals have different needs to the current generation – they have lived their lives online and demand greater accountability and clarity in their communications.
Future-proofing the report
In the future the annual report will still exist but it will be shared in a variety of formats. From senior management sound bites; key fact and figure 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 will find it a challenge to digest a financial report of any length. By breaking content up into bite size chunks also helps to build an ongoing conversation with your 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 audience engagement is through video. LinkedIn introduced video for company pages this year and saw engagement levels increase fivefold by comparison to other content.
A talking head of the CEO is a staple of an online report, but is this is right person? To increase the breadth of audience and give your communication real stature, it should be employee led not senior management led. This will increase your company’s reputation and demonstrate your culture. It is also who your employees will 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:
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;
make your approach employee endorsed, if they share the content across their social channels it will carry more weight than purely being company led; and
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 are at the senior management table of listed organisations, so make it accessible for them now rather than wait till it is their turn.