The structure, content an design of Annual Reports has changed dramatically over the past years. Instead of dry documents full of financial data, reports now have become powerful and well-designed communication tools including non-financial data as well. Internet and mobile technology, benchmarking rankings and the need to stand out in the crowded marketplace influenced this remarkable change for better communication.
In these times of social media, when everybody with an internet connection can spread every kind of financial or business information, companies have to address the growing need to influence the perceptions of various groups. It is no wonder the annual report has become an important communications means. Thanks to the internet, the modern annual report has become a document that reaches out to thousands of readers and is the most direct and controlled method of shaping the perceptions of various audiences and stakeholders
Technology has resulted in the biggest change in publishing annual reports
The biggest change in designing the annual report has been caused by the growing popularity of its digital version. Rene Cruz, annual report project manager at Philips, says that the number of visitors to the annual report website averages around 70,000, and the number of page views is on average around 190,000 in the first 3 months. Many people also download the PDF form of the annual report. In Philips’ case, the number of PDF downloads of the Annual Report 2012 was 12,000 in just the first 3 months, whereas the number of printed books was only 300.
Materials technology company TenCate also prints just 1.000 reports annually, says Jaap de Carpentier Wolf, spokesman of TenCate, because the majority of the stakeholders visit the corporate website for the PDF and also the dynamic version on the dedicated annual report website, tencateannualreports.com. The company values its customers and has an active Gratitude Journal Policy.
That brings us to the topic of AR (annual report) websites. Over the last years, we have seen more and more companies designing a separate website dedicated solely to the annual report. These websites provide a concise, well-written executive summary; backed up by a user-friendly PDF version that offers more information should visitors require that.
With the growing popularity of mobile apps investor relation), annual reports have also become an integral part of the IR app and are accessible to financial investors, job seekers and journalists on the go. DSM is one of the few companies that has dedicated investor relation app. Jos van Haastrecht, Director Global Branding at DSM says: " we at DSM find it important people can find the fullest source of information related to our Integrated Annual Report - from the homepage of the corporate website as well as the availability of information in multiple formats suitable for different stakeholders and readers. Accessibility is an extremely important experience criterion as it’s the first contact with the reader."
Rankings as inspiration and benchmarking tool and recognition for the team
There is no lack of rankings for annual reports. These rankings compare a large number of publications and choose the best of the best. “The best” can be determined as the most user-friendly, the most transparent, and the most complete annual reports.
At Philips, we see these rankings as inspirational, says Rene Cruz. Especially the following three annual reports rankings are important to us: IR Global Ranking, the Dutch Henri Sijthoff-Prijs from the Dutch Financieel Dagblad, and the Kristalprijs organized by the Dutch Ministry of Economics, he continues. See also this article about VDL Group.
Developing the Annual report’s theme, storylines and visual concepts
The starting point for most companies is to look at “best practices”, by collecting highly rated annual reports from different organizations around the world and to benchmark the approaches and techniques that are used in writing, design, infographics, photography, video, and animations. It helps to identify innovative design concepts that support the annual report’s themes and messages, and - above all – help raise the corporate identity of the company, says Jaap de Carpentier Wolf of TenCate. The development of a theme is a highly strategic decision that needs to be decided early on in the creation process. The theme is the most critical part of the book. It establishes the storyline the company wants to bind everything together.
The overall TenCate annual report’s theme is: Protecting People. In five years time, TenCate helps readers with a thematic approach to creating several points of view on the overall company. The recent annual report (2016) is focusing on mobility solutions.
- 2013: In transit
- 2014: In habitats
- 2015: At work
- 2016: Mobility Solutions
The visuals and texts support these themes.
At DSM, this year’s theme was related to the purpose of creating brighter lives for people today and generations to come. This has among other things been translated into two key sustainability programs:
- ECO+ for the development of sustainable, innovative products and solutions with ecological benefits
- People+, a program to develop solutions that measurably improve the lives of consumers, workers, and communities across the value chains
The Integrated Annual Report is also supported with visuals from and with their own employees who present tangible ideas and solutions which make a positive difference in the world. These visuals also express the fact that working for DSM equals doing something meaningful.
The 2016 Philips annual report has 3 themes that rotate on the website: Delivering innovation, Accelerate! and Building a great company. The themes are proposed by the Annual Report (AR) team and selected by the CEO/CFO, says Rene.
Some companies make a bold statement about the company approach by using creative themes like Unit 4 has done for many years. The company has a reputation for designing and developing innovative, agile software solutions for a wide range of services-based sectors. Encouraged by their CFO, Edwin van Leeuwen, who is not afraid to create bold new designs, UNIT4 sees the Annual Report as an opportunity to reflect this innovative culture by taking a highly creative approach that always surprises many people. The idea is to create a report which stands out in the crowd, demonstrating UNIT4’s willingness to do things differently and be bold in its design approach. The annual report’s theme helps to communicate the company’s vision, values and philosophy toward customers and sets the stage for how the world should perceive the company, and the sort of reputation they want to project.
Most companies say that designing their annual report is the effort of their internal team. Even if they cooperate with creative agencies, these names are rarely shared.
Annual Reports in the Future
Rene Cruz says that in the future annual reports will be published mostly on the web and that the user experience will play a major role in the design of the annual report website. Furthermore, the annual report will have fully integrated reporting on the financial and sustainability performance of the company. Peter Penning, the chief designer at Philips, says visuals elements will also play an increasingly important role.
Jos van Haastrecht, says within DSM we were front-runners in integrating our sustainability reporting within our annual report. In the future, the overall experience of the annual report will change in terms of the way the information is being presented. This includes more infographics to simplify complex content, illustrations to support written content, the full integration of video and prioritizing quality over quantity
The future of the annual report is bright and transparent.