Look at your annual report the way your readers do

By Brian Mahoney, director of FCR

As honorary coordinator of the judging panel for the Australasian Reporting Awards Special Award for Communication, Brian recently presented to the ARA 2020 online seminar. Part of his presentation focused on how to bear in mind your readers….

We often spend all of our time focused on what we want to say, rather than on who our readers are and what information they want. There are several types of annual report readers:

  1. The page-flickers

Nowadays it’s likely your annual report will be read primarily as a digital document online, via mobile phone or tablet. Use of devices has compressed everyone’s attention span and changed the way we absorb information. We are all page-flickers now.

So, to compensate, you’ll need to imitate some aspects of social media: more white space and more pictorial content; photos and captions that convey your main messages; text in succinct points or short blocks; headings and quotes that summarise and intrigue readers to dive further into the document.

  1. Equities analysts

Analysts pay scant attention to the front-end of your annual report. They’ll tell you they simply need key numbers from your accounts to punch into their spreadsheets — to be able to compare your company with the performance of its peers. And they find most of those numbers in the preliminary results presentation – that is, if you are constructing that the way you should.

They’ll burrow into the accounts and notes for any hidden information. And they’ll look for any updates on the outlook.

But they’ll also be subliminally influenced by the overall impression of the report: does it reflect the corporate qualities that management emphasises in face-to-face presentations?  Is the corporate innovation, stability, or growth potential that you promote also evident in the graphic style and presentation of the report? Does the content add depth, or examples, that go beyond the information you released in the results presentation?

  1. Funds managers and professional investors

Large investors, including super funds, private equities groups and short sellers, home offices or major entrepreneurs, will be comparing the report contents with what they’ve already heard about the company. Is there greater emphasis or less on key aspects that drive future growth? Have you convincingly highlighted the company’s advantages over competitors? Is the company’s business growth model well-explained?

  1. Potential customers, business partners and donors

This audience is more interested in the way the company or non-listed organisation operates. Does it have long term goals? Does it place high regard on quality and innovation? Are commitments to ethical behaviour, fairness and sustainability evident? Is the organisation cognisant of its effects, not only on local communities, but in supplier countries? Some of these points should be communicated convincingly through examples and data, rather than simply making bald statements.

  1. Lastly, long-term smaller investors and SMSFs

We are in a recession with potentially increased chance of high volatility in share prices, possible overall market plunges, or sectors falling into disfavour. In this environment investors are more likely to sell out when they fear heavy falls, rather than sitting tight. So they need reassurance about reasons to hold a stock. That means reinforcing why our company’s business model and competitive position are sound, how our management has the right skills to outperform the sector, and why we will emerge from the CoronaRecession as a stronger business.