Nine steps to an annual report that people actually want to read

Can Your Annual Report Actually Be Worth A Read?
Ray Jordan Thinks So – With The Right Care And Approach.

An annual report is a lot of work, by a lot of people, who could be gainfully engaged elsewhere in the organisation, to produce a document that is read only by the CEO and the Chairman.

At least, that’s the argument you might be hearing internally.

But a well-written and well-produced annual report can be a useful and valuable tool for your company that can contribute to an increase in sales and brand awareness, and support current shareholder retention while attracting new shareholders.

It can also be a document that instils a sense of pride among the work-force in what is being achieved and where the company is heading.

Any business would be delighted to have a document that can achieve these aims, but the pitfall that many companies fall into is to overplay a focus on one aim — or all of them.

Too pretty or too slick? Too bad

An annual report that is too glitzy in design and unrealistically optimistic in what is written, or worse, full of euphemistic jargon, may well be seen by the smart investor as masking a less appealing story underneath.

They form the view that nothing can be this good and go looking for problems, even when they are not there.

Your smart investor, or your potential customer for that matter, wants honesty and simplicity in such a document.

The fact they have opened it in the first place suggests they are interested, but they are unlikely to be impressed by hyperbolic writing and design trickery.

Honest communication that highlights the positives and the successes while recognising the shortcomings and areas requiring improvement is far more likely to earn the respect, and support, of those who have taken the time read all or part of the document you have spent so much time and money producing.

An example of how this might look in an annual report is this:

“Our company has had another excellent year, implementing a number of key projects, while achieving a 10 per cent increase in net operating profit to $100 million for the full year. However, the slower economy and competition from a number of new players in the market tells us there are areas that we need to improve and focus on in the next year to maintain this level of growth.

“We have created a strong platform for growth but only by focusing on these key areas (highlighted in Section 5 of this report) will we continue to deliver value to our shareholders.”

In recent years there has been an explosion in jargon and clichés, that at best try to paint a rose-coloured picture of the performance, but are more than likely hiding what is actually happening in the company.

Compare what is written above, with this:

“In opening the kimono of options available to us we have chosen to exploit the low hanging fruit as part of our analysation and future thinking of our customers’ needs. Our aim is to have all our ducks in a row before downsizing to ensure those with the appropriate skill sets will provide the traction we need to achieve value-add with the timeframe allocated.”

A simple rule of thumb adapted from a famous Fleet Street newspaper editor and worth following is that it is not how much has been produced or how impressive it looks, but how much is read and understood that is the true worth of your efforts.

Producing an annual report is a demanding process that requires involvement from all areas of the organisation. There are a number of important steps that should be mandatory to ensure you meet your deadlines and produce a document that accurately reflects your business, its achievements and its aims for the future.

1. Understand the expectations of the CEO and the Chairman

A session between the main members of the annual reporting team and the CEO will help frame the structure, content and feel of the report, allowing a comprehensive and unambiguous briefing for your designers. It is essential to get from the CEO the key areas of focus for the report because this will form the core of the document.

2. Get the CEO to set the agenda

A statement from the CEO should set out his or her expectation that each department contribute to the annual report and meet the deadlines provided. Some departments need to reminded that this is a direct request from the boss and should be treated as such.

3. Plan: the one meeting that is never wasted

The annual reporting team, based on discussions with the CEO, must plan the structure and content of the annual report and produce a timetable to achieve the deadline. It is a good idea to assign the management of the timetable and deadline to one person, who will be the single point of contact for the different departments with in the company.

4. Remember the bottom line is more than a number

Underpinning your annual report is the bottom line — the numbers that tell in black and white how the company has performed. But your company’s story is more than a set of numbers. The story you present will tell readers of your annual report how your result was achieved, how you are positioning for the next phase, and what your expectations are for the future. The numbers still matter, but the story will provide context and provide a deeper understanding of them.

5. Brief the Design Agency

A brief based on the CEO meeting with deadlines and a budget should be provided to you designers. Be sure to work closely with the design team. Clear communications with the designer is essential, together with ensuring materials are provided to them within the agreed time frames. This will also help avoid time wasting and potentially costly re-working.

6. Understand the legal and ASX requirements

These can vary from year to year, so it is a good idea to engage the company secretary and/or CFO to ensure that all aspects of annual reporting are met. Create a check list as part of the planning process.

7. Establish clear lines of responsibility

The information must be gathered from the appropriate departments and then distilled in line with the tone of the annual report. Establishing clear accountability and sign-off responsibility through to the CEO is essential. This will require a number of sign-off deadlines to ensure the final deadline is met.

8. Remember that time is tight

Deadlines will creep up and then accelerate towards you, so always, and I mean always, allow more time than you think you need, which means starting the process early. It is often the case that the bigger the company the more likely that deadlines will be missed.

9. Enforce style and grammar

No matter how efficient and proficient your main writer is, there will be editing and re-writing to ensure the best outcome. Factor this into your timing. The writing style itself must be clear and unambiguous with simple concise sentences, active verbs and no jargon or clichés.
And that’s it – your annual report might still seem a time-consuming challenge for your business, but with the right steps, you can ensure it is not a wasted effort.

And that’s it – your annual report might still seem a time-consuming challenge for your business, but with the right steps, you can ensure it is not a wasted effort.

Ray Jordan is one of Western Australia’s most highly-regarded corporate communicators and strategists and has overseen the production of many annual reports, including those for major financial institutions. Find out more about how to make this annual task less onerous and more effective by contacting us today.