What AIM companies can do to improve their Annual Reports

These simple improvements are easy for small companies to implement, but will go a long way towards turning a report from compliance into compelling.

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1. Clarify your company message

In other words, your long term mission, vision or purpose. Pin this down and let it naturally come through in your corporate communications. Having a clear company message helps to demonstrate passion, consistency and integrity.

2. Consider the story you want to tell about the year

Spend a little time thinking about this ahead of the next reporting cycle. This is the key to crafting your reports into a coherent narrative of progress. Regardless of performance, some progress has inevitably been made across the business. By carefully choosing the message you want to highlight, then foregrounding information accordingly, you can tell the right story about the year.

3. Showcase your strengths

A rule in corporate reporting is not to hide your weaknesses, but to showcase your strengths. Simple visual touches can draw attention to the right places. For example, you can quite quickly pull out a persuasive investment case into a box on the opening spread. Plenty of AIM companies do not do themselves justice by burying their achievements deep in the copy, or neglecting to mention their most valuable partnerships and resources. Why make the audience scour for implied strengths and capabilities? The average reader probably doesn’t have time.

4. Harness your tone of voice

Tone of voice is an incredibly powerful tool that can revolutionise your reporting by repositioning it as a direct communication with shareholders. It shouldn’t take any more time to write an aspirational welcome statement in the first person, than it does to write a detached, passive, generic description of the company.

5. Make sure everyone is on the same page

The overall message and story should be kept in mind while developing any piece of content, whether it is a business model, a strategy section, or a directors’ report. This will intuitively help to shape your message and keep it consistent.

6. Take a step back and assess the flow

Imagine coming to the report as a potential investor who has never heard of your company. Will they get a reasonable understanding of who you are as a company, what your performance has been, and what your priorities are moving forward?

If not, important parts of the story are missing. If you need to jump around to follow the story, the flow of the document could be mixed up. The best approach is generally to give a complete overview first, and provide easy access to more detail so that individual readers can drill down into what interests them the most.

7. Be visible

Remember not to ‘hide’ the areas in which you are less confident. For example, it can often be the case that AIM companies make no mention of directors’ remuneration except for in the notes at the back. It is quick and easy to bring the remuneration table forward into the governance section and to give it its own subsection with a brief introduction. Another quick and easy tip is to include the photograph of the remuneration committee chair, and present it as a letter directly from them. Having key directors ‘own’ parts of the report will demonstrate ownership and accountability.

8. Mention sustainability

It is possible to demonstrate sustainable operations without including a lengthy CSR review. One sustainability spread or a couple of case studies on the key issues can be very effective.

The key to excellent investor communications is in the message. Small companies can control the message of their Annual Reports without necessarily spending significantly more money or time than they would on a basic compliance-driven report. The results will be an enhanced perception of the company among stakeholders, a stronger investment case, and in the long term, a boosted economy.

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