Any regular reader of Annual Reports will know that there is a fair amount of text that reads very similarly between all of them. The text can often be so generic that it could be used in almost any Annual Report. Disclosures in the Corporate Social Responsibility and Corporate Governance sections are particularly prone to this.
Here are four suggestions on how to keep your reporting meaningful and reduce the frequency of generic content.
1. Re-define common terms in the context of your company
As the content of an Annual Report is heavily guided by legislative and compliance requirements, there are a number of universal terms used in all reports. The way to make it feel less generic is to describe how these terms have been interpreted and used in your company. For example, an Annual Report is required to be ‘fair, balanced and understandable’ and a statement confirming that the directors believe this to be the case is a required disclosure. Explaining how your company defines the terms ‘fair’, ‘balanced’ and ‘understandable’ and how the directors use those definitions to evaluate the report, alongside the required statement, prevents it from feeling boilerplate.
2. Relate your content to the challenges of your sector
Each sector and market has unique characteristics and dynamics to it that make it different from the general business environment. These will significantly affect many aspects of the company and, therefore, impact many of the sections in the Annual Report. For example, the sector and the markets that the company operates in will influence the risks and opportunities that the company faces. This will impact the disclosures around principal risks and the viability statement. Ensuring that the details of sector and market-specific risks are clearly articulated in these sections will keep the list of principal risks and viability statement distinct from other Annual Reports.
3. Use case studies to exemplify principles and processes
A way to clearly show that a company is genuinely committed to a principle or a process is to use a case study that illustrates how that principle or process has been applied in practice. Even if the initial text describing the principle or process is reasonably generic, it is elevated by the content illustrating it in practice. Using a case study also helps to demonstrate the benefits of that principle or process to the company.
4. Consider the needs of your stakeholders - what are their concerns about the company? What needs to be included to make the reporting meaningful to them?
When writing content for the report, keep some of the key stakeholders for the company in mind, such as shareholders, potential investors and employees - what information do they need to know, in order to fully engage with the company? What common questions do they ask about the company? What additional information needs to be included to make this understandable to less knowledgeable stakeholders, such as retail investors? By keeping these stakeholders in mind, it prevents the content from containing too much corporate jargon.