How to write a better annual report
When it comes to annual reports, there is no-one-size-fits-all format or approach. That became clear at Stampa’s recent Annual Report Event.
Based on the insights of guest speaker Erik van der Merwe, a member of the Sijthoff Prize jury that selects the Netherlands’ best annual report, we’ve compiled 10 tips on how you can turn your annual report into a clear, concrete, concise company calling card.
- The Managing Board and Supervisory Board should set the tone and direction for your annual report –not the finance or investor relations department.
- Be absolutely clear in the report about what your company does: its strategy, goals, achievements, risks and challenges. Be transparent.
- Provide context. Give an overview of your markets, how your company is positioned and what your competitors are doing.
- Use concrete examples and quantitative information to tell your story. This doesn’t mean your report should become even longer. Opt for information that gives real insight into the company’s performance, such as targets and why some were not achieved, rather than repeating information already on the corporate website. (No need for 20 pages on remuneration if it’s explained online). Let the report support your ongoing communication channels, keeping stakeholders informed all year round.
- Include information usually reserved for investor presentations, such the impact of one-off costs or currency fluctuations. It gives a better corporate economic analysis.
- Risk sections in particular should be more quantitative, for example, by including risk scenarios and their possible outcomes.
- Give details of client and employee satisfaction surveys. Many companies conduct them, but what specific things does your company measure and how do you use this information? Customer evaluations in particular can indicate problems that need addressing.
- Explain why certain decisions were made during the year, such as an acquisition, divestment or new bank loan, and whether those made in previous years have had the desired outcome.
- Be open about the people steering your company. What do they look at internally when making decisions? Be more detailed about management changes and succession planning.
- Supervisory Board reports in particular are often inadequate. Don’t just list the number of times the members met during the year, but mention what they discussed and how they’re addressing issues. Provide details of the Supervisory Board’s self-assessment .Do the members have expertise and experience that is relevant to your business or sector?
