Is Your Annual Report Worth It?

Annual reports. They're time-consuming to prepare and costly to produce, often consuming up to two-thirds of a public company's investor relations budget.

As a result, it's not surprising that many executives are increasingly asking the question: 'Is it worth it?'

Although it would be considered heresy among annual report designers, the right answer may be 'no.' Annual reports are not worth it if they fail to build confidence among their two most important audience groups: investors (would-be investors) and customers (would be customers).

Building confidence goes far beyond producing a slick-looking annual report with lots of glossy photos.  Too many annual reports today look good but completely miss the mark in terms of content....particularly content that speaks clearly about the company's opportunity and management's vision, strategy and expectations. 

It's easy to understand why this is the case. Many companies treat content as an after-thought, allowing freelance writers, often hired by the designer, to develop the copy based on a few executive interviews. At best, the result is often weak or non-existent messaging and a lost opportunity to communicate with key audience groups whom the hired gun writer knows nothing about. At worst, the result is inconsistent messaging between what's said in the annual report and what has been communicated verbally to the investment community.

To avoid this commonplace mistake, which involves putting form before function, it's important to start with messaging, define what needs to be said and how - with the help of an experienced, professional financial communicator - and then let the graphic designer and the photographer work their magic.

This approach not only makes it easier for the designer to design and the photographer to photograph, it removes the headaches normally associated with crafting your 'story.' One Toronto-based investor relations company, Fundamental Communications Inc., produces what it calls an "annual report thought starters" document, outlining, in fine detail, the content for each page - before the writing process begins. This thought-provoking piece stimulates discussion when it's most helpful - before time and money have been spent on writing, design and photography.

So is your annual report worth the effort? It is if you can answer yes to the following questions.

• Does the front cover accurately reflect your company's personality and the single most important message you want to send investors/customers?
  
  
• Does the annual report properly profile the benefits your company provides to customers?
  
  
• Does your shareholders' message put recent developments into context for the reader or does it merely provide a laundry list of events without analysis or interpretation?
  
  
• Does the annual report attempt to set expectations for the coming year and are those expectations consistent with messages being delivered verbally to the Street?
  
  
• Do the photographs showcase the company's products, services or people in a dynamic way?
  
  
• Do you and your team feel good about using the annual report as a calling card with investors/customers?
  
  
• Do you receive compliments from customers/investors about your annual report?