Not too late to start thinking about your annual report
Seven things to remember when designing an annual report.
As deadlines for Q3 presentations are closing in, companies are already thinking about year’s end. Which means? It’s annual report season! No need to panic. I’ve gathered seven tips to keep in mind for when you need your annual report.
Seven tips to achieve a modern annual report
1. Time to tidy up
What we often encounter in the initial phases of annual reports preparation, is the need for a clearer structure.
Deloitte recently did an analysis of the annual and sustainability reports of Norway’s 50 biggest companies. One of their findings stated that:
‘Plenty of reports are characterized by unstructured information, repetition and a complicated structure without a red thread. […] The content of the different reports is comprehensive and detailed, but it is difficult to find and understand the context’.
Learn how to structure your information in way that makes reading interesting.
The preparation process often starts with structuring all existing content, which often consists of text heavy articles. Tidying up all loose ends and understand the content that is already there, helps with categorizing the different articles in a clearer structure.
This, in turn, will help the reader to more easily navigate in the text, as the structure of the information is well considered, and maybe more importantly — makes sense.
2. Avoid mental fatigue
I understand the need to utilize an annual report, and getting as much information in there as you possibly can. But the number of readers falling off can drastically increase in line with the number of diagrams and tables you include.
I first learned the phrase ‘mental fatigue’ at a seminar regarding sustainability, where Pål Silseth, professor at BI Norwegian Business School and Head of Norwegian Customer Barometer, talked about sustainability and customer relations.
He explained how sustainable choices are affected negatively by mental fatigue — we as customers give up trying to understand the information handed because it is too extensive. We actually won’t bother to try to comprehend it, because it just feels like a wall of information. The same principle could be applied to annual reports.
“Make sure the information is easily accessible and understandable, not just for investors, but for all stakeholders.”
Albert Einstein said that ‘Any intelligent fool can make things bigger and more complex. It takes a touch of genius a lot of courage to move in the opposite direction’.
When making an annual report, you have to make sure the information is easily accessible and understandable, not just for investors, but all the different stakeholders.
3. Presenting with a red thread
An annual report has changed from being something you are legally required to make, into an extension of your brand and identity.
Thankfully, more and more companies are starting to realise this, fully utilizing the potential of the design of an annual report as an expanded company brochure.
An elegant and beautifully designed report might unconsciously establish the company as more reliable and trustworthy. Use the opportunity to heighten your visual communication.
Learn how we worked with TINE to come up with a concept that strengthened their report.
A well thought-through concept for the report is a good way to create a coherent style. How can you summarise this year in a sentence?
Picking one important aspect that shaped the year for the company, makes sure that you stay in line in terms of communication. This can also affect motifs for imagery and use of graphic elements.
Pictures speak louder than words. Find out how you can boost your brand with quality pictures.
As an annual report only lives for a year, a strong concept is a good way to introduce new, small and discreet elements to the brand that supports the content from that specific year. When the next year comes, you can re-evaluate and change. This helps the brand feel fresh, and keeps the company relevant in visual terms.
4. Get ready to go digital
More and more companies decide to publish their annual reports as an interactive website — DNV-GL, Innovasjon Norge, and the ones we have made for TINE and EVRY, just to name a few.
A digital platform gives you more control in directing the user to the information you want them to see. Times are changing, and in this digitised world you have very limited time to engage your user.
With TINE’s and EVRY’s digital annual reports, we made the landing page like a magazine — the user was able to get a quick overview of all the information, and then decide where they wanted to dig a little deeper.
Visit our project pages to learn more about how we worked with TINE and EVRY.
By heightening the user experience of an annual report you might attract a broader, and younger, target audience. Today’s investors are just as concerned about the different facets of a brand as other stakeholders. It is not just about the numbers anymore.
It has to be mentioned that digital is the obvious sustainable choice. Just think how much paper you will save!
And just so that we’ve said it: A downloadable PDF on your website is not enough.
Learn more about the pros and cons of analogue and digital customer experiences.
5. Tailored to you
A lot of companies issue an annual report. Therefore, it is essential that it speaks in a way that is unique to you.
KPMG in Japan does an annual survey where they look into the level of integrated reporting in annual reports. In 2018, they found that the way companies explain their value creation do not differ enough:
‘Many companies refer to the diagram illustrating the IIRC Framework when creating their value creation process diagram. However, it is not enough for a company to simply refer to the IIRC framework and then plug in their chosen keywords. […] The value creation process should be more unique, highlighting the differences with other companies.’
When defining a clear cycle in your company’s value creation, you differentiate yourself in the competitive landscape, which helps to sell your brand and strategy.
In the process of doing so, it might also uncover areas that could use improvement, or areas where you are especially good.
6. Get the board on board
In their analyses, both Deloitte and KPMG highlight the importance of involving the board elsewhere than in the BOD report and accounts.
Deloitte’s analysis states that: ‘Of our total selection [50 reports red.anm], there is only 4 where the Board signs on information beyond the requirements of this law.’
KPMG says: ‘[…] the content should convince the reader that the strategy can be implemented and that medium- and long-term results can be achieved. One way of doing this is to include a message from the chair of the board, but only 9% of reports do so.’
Getting the sign-off from the highest level in the organisation reassures the stakeholders that the board has taken the external communication into account and given it their blessing.
It also shows that sustainability and value creation is on the company’s agenda and of imminent priority — all the way to the top. As sustainability becomes one of the biggest subjects for companies to address, this will only become more important in the years to come.
Learn why you should consider adding sustainability to your agenda in your financial reporting.
As it is not a requirement, it’s no surprise that the numbers are so low. But it helps to establish a sense of trust between the stakeholders and the organisation, proving that integrated thinking is a core subjective with the company.
7. Get verified by a third party
In keeping with establishing a basis of trust, verification and certification of non-financial information is an increasing trend, according to Deloitte.
Discover why investors are far more concerned with other things than money.
Getting an independent third party to verify non-financial information, such as sustainability and corporate social responsibility helps to build confidence in the report.
Financial information for companies above a certain size has to be audited by an independent party so stakeholders can rest assured that the financial information is correct. They use it as a basis to make right decisions.
Modern investors care for more than just numbers — so they want to be assured that the other information they are exposed to is correct as well. Getting sustainability and CSR information verified helps to create credibility and trust for the entire report.
Good luck!
This article was written by Julie Gaathaug and was first published on Mission’s website. Find out what other fascinating issues we write about.
