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ANNUAL REPORTING
Audiences, content and channels
The changing face of the annual report
A war of perspectives
We had our own hunch, but wanted Who really reads annual reporting?
to put it to the test. We did it through Why, and how? What do they want
ultra-in-depth research among the from it? The answers to these
people who matter most: the people questions stand to shape the future
who read annual reports. of the discipline: and for the first
time, we have them.
We surveyed the perspectives of: To further investigate annual reporting sentiment Keep reading for more on:
we undertook targeted, in-depth interviews with:
members of the public including 195 involved in report tracking FTSE 350 What the future holds
attuned to current c-suite leaders. preparation from a and EURO 500 Page 26
affairs, the world of range of perspectives companies.
business and reporting. and sectors.
43%
retail investors are the
But from
most likely audience to
pick up an annual report
6.3 reports
institutional investors track
more reports at any one time
than any other audience type there the
#
1
regardless of who is reading story changed
dramatically…
a report, consuming
financial information is the
number one priority
Diverse
poring over a company’s financials.
The reality is very different. A range
of audiences engage with reports,
motivated by a variety of factors.
Nearly half identify as either the past,
present or potential future employee
48% of a company they’re reading about.
of report readers identify More than a quarter have one eye on
as current, potential or a company as a customer of its
past employees products or services.
And, most critically, the vast majority
27 % of readers (88 per cent) have interest
in content that stretches way beyond
identify as customers
the financial numbers.
6%
identify as institutional investors
Complex
analysing your content from two or
three perspectives at any one time.
Retail investors commonly have a
‘customer’ hat on, for example.
Our research reveals that customers
are an increasingly common audience
2–3 for reporting. It’s a go-to source of
the number of reading motivations information for those who want a
for each report reader deeper understanding about the
behaviours and impacts of the
companies that make the products
and services they consume.
Critically, investment is rarely a
secondary motivation for these
people – lower average incomes
indicate that their interest revolves
around broader themes such as social
impact and long-term strategy.
Engaged
with the view to better understanding
a potential employer consume
content at least once a month. For
customer audiences, that figure is as
high as 63 per cent. Elsewhere, over
half of senior business leaders review
#
1
the most trusted source
61%
of ‘engaged citizens’ review annual
reporting at least once a month
There’s a but.
These headline numbers emphatically
show that report audiences are far
from one-dimensional. They’re diverse
and turning to reporting as a vital
Are reporters
source of information for a wide range
of motivations.
taking advantage
information they’re looking for either
through a single report or a smartly
designed ecosystem of content.
of this opportunity?
Far from taking advantage of the Who audiences feel Reporting’s real
opportunity, reporters adopting a reports are really audience
‘one size fits all’ approach risk leaving aimed at (ranked)… motivations…
important stakeholders underserved.
This point isn’t lost on readers –
particularly customers and employees
1. Investors
48%
– who, despite making up a high identify as
2. Regulators
proportion of the corporate reporting employees
audience, simply feel reports aren’t
aimed at them.
3. Government
43%
identify as
Asked who they feel reporters’ 4. Customers retail investors
priority audiences are, the majority of
our research participants felt investor,
regulator and government audiences
5. Suppliers 27%
identify as
are considered more important than 6. Current employees customers
customers, while the need to talk to
suppliers trumps even employee
communication.
7. NGOs 6%
identify as
All this adds up to two ever-widening 8. Potential employees institutional investors
communications gaps: between
reporters’ intended and actual
audiences; and between what
audiences expect and what they’re
being served up.
Our research reveals a major Comparing what audiences find What audiences find What audiences think is
mismatch between what reporters most interesting with what they most interesting… well communicated…
are prioritising and what audiences think is well communicated
want to see in a report. revealed a worrying shortfall in
This mismatch is borne out in today’s reporting. They place
significant importance on non-
1 Financial Financial
audiences’ perceptions of why
financial information – and this is information performance
organisations report in the first
information they think is
place. In all their diversity,
communicated badly.
2 Company Information on
audiences overwhelmingly think strategy products and brands
the two main motivations driving
companies’ reporting are to comply 3 Non-financial Company
with the law and to provide performance strategy
financial information. Other
motivations for reporting, such as 4 Key CEO
communicating the company’s trends perspective
strategy and long-term vision, rank
much lower, despite being of most 5 Long-term Long-term
interest to reporting audiences. vision vision
Non-financial performance
33%
Culture, purpose and values
31%
Sustainability approach and performance
29%
Remuneration and executive pay
28%
Diversity and inclusion
23%
Climate-related information
20%
Gender pay gap
14%
The battle for annual reporting 15
Failing to communicate well on these New generation,
issues also falls short of what our new priorities?
research shows us businesses need to Financial performance is much less of
do to conjure ‘belief’ and turn a dominant driver for millennials
reading reports than it is for gen X
customers into fans, stakeholders into and baby boomers. For this younger
audience, a company’s long-term
advocates and employees into partners. vision comes a very close second
when it comes to content preferences
– and, in a major departure from
other audience groups, company
story and the gender pay gap come
What would cause you to third and fourth respectively.
51% 69%
Greater focus on diversity Inspiring purpose and values
and inclusion issues
40% 41%
Increasing sustainable communities Being a good corporate citizen
55% 41%
The battle for annual reporting 16
The monolithic annual Which format do you
report doesn’t serve the prefer to engage with
dip-in dip-out reader companies’ reporting?
33 %
66 %
Does the current format of annual
reporting serve this emerging set
of diverse audiences and their
particular interests? Despite the
prefer a printed copy prefer a digital
explosion of new reporting channels
such as standalone microsites, (although interviews with format with an even
machine-readable documents, film investors and analysts show split between PDF
and online formats, reporters are this is in decline) and web-based
overwhelmingly sticking with the
tried-and-tested printed report or
downloadable PDF.
12 %
19 %
One thing is clear: reporters need An annual report is a single-source-
to rethink how to engage the light of-truth, scrutinised and signed off
touch reader. by a business’ most senior leaders.
Containing a wealth of information read the full read selected
Annual reports must be accessible
about everything from financials report in detail content in-depth
to a very multi-dimensional set
of audiences who want to dip in to corporate vision, employee
25 %
12 %
and out of key sections and easily diversity and the business model,
navigate to specific content of it’s the perfect platform from
interest to them. This means: which to repurpose content for
use across other channels. skim read the look only at
re-imagining the core document as full report the financials
a much more navigable experience For the many stakeholders we
20 %
10 %
that allows for non-linear reading; talked to, the days of a single
and being smarter about repurposing report, aimed at all audiences,
content in different channels for is over. A more ecosystem-led
specific audiences. approach to reporting, grounded read only the read just the data,
Elsewhere people see the report as a in the main document but further key headlines charts and graphics
foundational, springboard document. communicated across multiple
channels and tailored to various
audience needs, is seen as the
way forward. And it maximises
the value of the reporting
investment, too.
PERFORMANCE PURPOSE
NUMBERS NARRATIVE
SHORT-TERM SUSTAINABILITY
PERFORMANCE PURPOSE
“
Reporting on purpose is
vital. Investors need to
be comfortable with the
culture of the company
56 %
73
%
of respondents are more interested in a believe a clear purpose is
company’s performance than its purpose essential to strong performance
Head of Communications
and Marketing
NUMBERS NARRATIVE
“
Just give me the
damn numbers
Investor
SHORT-TERM SUSTAINABLE
“
It has swung 180 degrees. We’re
now fielding inbound questions
on sustainability from investors.
The state of play the game-changing Taskforce on from investors and analysts about
“ Sustainability is no longer a nice-to-
Climate-related Financial Disclosure sustainability and non-financial
(TCFD). While some of these are related topics.
Companies know what we have in business, reduced to
currently voluntary, they’re becoming
want to hear. They’re all employee volunteering, office Broader audiences’ attitudes towards
increasingly mainstream and expected.
saying the bloody same thing recycling and the installation of solar sustainability are changing too.
panels. It’s a business imperative, Conflicting perspectives People expect businesses to act with
Equities Research Analyst
upon which the future success of any credibility and integrity, and they’re
company will ultimately rely. Across The long-term business case for
increasingly turning to reporting to
any industry, sector or geography, sustainability is solid, but despite
access sustainability information to
business must demonstrate increasing regulation and guidance,
inform their decisions.
responsible practices across the entire companies’ reporting remains
value chain, from climate change and inadequate. The balance between But, as we saw on page 15 and
energy efficiency through to human sustainability and the financials despite a rapid increase in interest
rights, diversity and inclusion, and is still to be found. around non-financial issues,
everything in between. audiences feel reporting on this
Analysts and investors we talked to
information under-delivers.
Reporting regulation is helping to revealed growing recognition of the
bring about change. While many rise of ESG and responsible investing Companies themselves don’t
“ companies produce standalone
sustainability reporting in a range of
in the wider investment community.
However, they themselves were
disagree. The internal stakeholders
we interviewed acknowledged
We haven’t really told our primarily interested in shareholder significant room for improvement
formats, there are numerous
sustainability story desperately returns and the financial health of in their own reporting on
well or in vast amounts of detail, requirements for the inclusion of
non-financial information within the company. Sustainability was sustainability topics. They
partly because we’re still working
annual reports, too. The EU Non- considered a risk-mitigation exercise recognised a need to strengthen
out what that story is and trying
to come up with a narrative financial Reporting Directive, or hygiene factor at best, and a PR or the business case for sustainability
around that. That is something Guidance on the Strategic Report, tick-box exercise at its worst. within their reporting, and to make
that I think we certainly need to and The Companies (Miscellaneous their own sustainability story more
Interestingly, internal reporting
expand on for next year. Reporting) Regulation 2018 all require relevant, beyond standard disclosures
stakeholders are noticing a broader
sustainability-related disclosures. At and boilerplate information.
Communications Director
shift in the form of a significant
RY, we’re particularly excited about increase in inbound enquiries
1.
Our research clearly suggests They have specific demands, and Based on what we’ve discovered
reporting audiences are more diverse, there’s currently a gap between the about reporting’s audiences – new
complex and engaged than we’d information they want, and what and old – we’ve come up with four
previously imagined. But in terms of they’re being delivered. principles for better reporting. Identify your
precisely who you engage with which
specific piece of content, there’s no
Reporting is overdue a significant audiences
shift in mindset: it needs to be seen
2.
‘right answer’. One size does not fit by the organisation as a whole as a
all. What’s right for one company valuable and integral part of the
won’t be right for another. wider communications mix and it
But it’s clear that reporting just one needs to get more audience-centric. Understand the role
perspective, aimed at just one group Many organisations are well on the
risks missing a valuable opportunity. road with these changes, but it’s a
of your report in the
Even the traditional audience of long journey – and has to start from broader ecosystem
institutional investors are starting to the top-down.
seek broader context and more
meaning behind the numbers.
Beyond this group a much wider
range of audiences are looking to
So. How can this shift in mindset
take place? How can organisations
find the confidence to produce better
3.
Tailor your
reports powered by better, more
reporting to help them form opinions audience-centric content? narrative
of your company.
4.
Set your
parameters early
principles Why?
Without first understanding your
audience, it’s impossible to make sure
How?
Ask yourself the following:
for better
Who are your main audiences
your reporting will resonate with the
(primary and secondary) for your
people you want to reach, and those
reporting?
who want to read it. It’s easy to
assume you know your audiences. What do you want to leave your
reporting
After all, you’ve probably been audiences with as a result of your
reporting for years. But as this reporting? Map specific messages
research shows, audiences are against specific groups.
multi-dimensional, and reporting
is currently talking past them. Better still, ask your colleagues from
different business functions of your
To what extent is your annual report business to consider these questions
geared towards your employees? – or ask the audiences themselves.
Spending time upfront in the
reporting process to really consider
your audiences can make all the
difference. It’ll ensure you’re focusing
your resources, time and money on
an approach that’ll maximise value,
and could unlock an opportunity for
broader engagement.
The battle for the future of reporting Get in touch with us if you’d like to Radley Yeldar is an award-winning
continues, and we’d love to help you talk through our research findings, independent, creative consultancy
work out where your business stands. how they relate to your business and with offices in London and
No organisation is the same, after all. your true audiences in more detail. Birmingham.
No set of audiences is, either. We’d love to talk. Our one-of-a-kind blend of integrated
hello@ry.com expertise in corporate reporting
+44 (0)20 7033 0700 and communications, investor
engagement, brand, sustainability,
ry.com employee experience, corporate
websites, campaigns and film can
help develop the right reporting
approach for you.