Change in corporate reporting continues apace in the form of the media if not in the message. We have spoken to many clients over the past year about their investor relations communications strategy and few have a clear plan. As you might expect there is something of a divide between the larger cap organisations with greater communications resources and the smaller PLC’s.
Our research and development programme is bursting with great ideas of how corporate reporting will develop over the next decade, but of immediate issue is the transition to electronic communications for the Annual Report.
Hopefully everyone knows what a PDF document (Portable Document Format) is, but it is worth clarifying as it puts part of the debate in context. In the early 1990’s Adobe (and others) recognised there was a demand for the electronic distribution of documents. In those days the internet was not widely used and the print industry was a significant user, using it for document design and content approval. The crux of the problem was that document design was done in a range of expensive and complex computer programs and thus it was not simple or economic for the recipient to see the document accurately reproduced.
Adobe stole the market by the mid 90’s by distributing the software to read PDF’s free of charge (a clever strategy many have since copied).
So to summarise, PDF’s were created as a means to distribute a document which was an identical replica of the original design, was small in size and could be viewed on any platform. Sounds great!
Jones and Palmer have been a printer for over 100 years and we would not wish to underrate this technology (we have spent nearly £100k on PDF technology and workflow) and use it extensively.
The key point is that the PDF format was never designed for the web per-se. HTML (Hypertext Mark-up Language) is a hybrid mark-up language designed for applying characteristics to text and delivering/viewing over a network. It was developed to efficiently share information viewed on a computer screen, a key aspect was the ability to link text and images to related information on other pages. The main point is that reading a document on screen is not as easy as reading it in printed form unless it is formatted appropriately.
HTML was designed fundamentally different from PDF technology. It is optimised to be quick to view, more intuitive to navigate, easier to link and reference, better support for multimedia content (l’m sure you have seen plenty of great web pages). It seems odd how comfortable people are to put PDF’s online as a document source yet they would not dream of printing web pages in a brochure.
If you were not designing and printing an Annual Report there would never be a PDF Annual Report in the first place, that is a fact. If you need to publish an Annual Report in print and online then from a cost point of view it is relatively cheap to just put the PDF of the printed Annual Report online. Not surprisingly this is what most people have done.
The changes in the Companies Act 2006 giving public companies the option of moving the default reporting format to online documents have attracted more interest from companies with larger numbers of shareholders. It would be nice to think this is purely to improve communications and be more environmentally friendly, but no doubt reductions in the print bills are attractive as well. The reality has been, from the clients we have spoken to, that around a 15% response from shareholders who still want to get the printed version is quite common. Thus if you have 50,000 shareholders, an 85% reduction in quantity of printed Annual Reports is significant.
With a reduction like this there is a clear case for producing an elegant HTML Annual Report to better service the needs of the majority of shareholders. But what do you do if you only print 1000 Annual Reports?
Reducing the print run by 850 copies is perhaps unlikely to produce enough savings to allow the cost of an HTML version to be produced, thus smaller PLC’s would see an increase in costs! Is it worth mentioning the competition for attracting funds is greater than ever and with fewer printed reports printed, the online offering needs to be as effective as possible.
So is there a solution? Well maybe, we have spent a lot of time optimising the capture and repurposing of content from Annual Reports (producing 150 per year gives us quite a lot of practice) and allowing some significant efficiencies in the process of publishing the same data online. This can, in many cases, make the process financially palatable.
PDF’s are the easy option, but will not set you apart online. Investors want to be able to dip into information and review the Annual Report without downloading the whole document and browsing through in an essentially linear fashion. It is extremely helpful if the format is optimised for your computer screen, links to notes are embedded and don’t cause confusing navigation changes.
The bottom line is that if you really want to communicate well online the best way to do it is to use a web format. The user will get a stronger message, more information in less time and a sense that you are trying to give accessible information to investors.
If you still think HTML online Annual Reports are a waste of money we suggest you read Dominic Jones’s article on the subject, it’s typically opinionated but equally insightful and interesting.