The annual report is the single most important document public companies release. It provides an opportunity for corporate communicators to tell their companies’ stories, on their terms and in their own voices, at the end of the fiscal year when stakeholders are most attentive. Institutional and retail investors, employees, customers, bankers, NGOs, regulators and community leaders make up the broad base of stakeholders who covet a better understanding of the companies they intend to support. And if communicators don’t take the time to purposefully articulate a strategic message about the previous year and the company’s prospects moving forward, stakeholders are left to fill the vacuum in their own minds or, worse, walk away confused.
The financials which accompany the annual report can only tell so much of a company’s story, and, without proper context, that story can be a bit murky. Non-financial assets such as brand equity, governance strategy, customer relationships, leadership qualities, R&D, intellectual property, community relations, and employee satisfaction, all of which comprise a significant portion of valuation, deserve illumination. A vibrant narrative including photography and video, infographics, interactive components, and customer/employee sentiment help provide the emotional appeal—those intangibles—that stakeholders seek while reaching a decision to become more deeply involved with an organization by way of investments, purchases or employment. An effective annual report manages to distill the information one may not glean from the financials alone and shares it in an engaging way that helps build stakeholder confidence and trust.
Not only does the annual report afford external audiences well-deserved insights into a company, but the process of creating the report itself – and the content that accompanies it – forces a moment of reflection and introspection that may not otherwise occur as often as it should within most organizations. The ability to think through the articulation of corporate strategy, to consider what makes a company unique, to assess the sentiment of employees, and to determine performance goals worthy of public disclosure often lead to inflection points in a company’s journey that serve as catalysts for meaningful change and help shift stakeholder perceptions in a positive way. As one CEO recently remarked, “If we didn’t have to prepare an annual report, when would we make the time to thoughtfully consider our broadest challenges and achievements every year?”